Brunswick Corp 2Q Preview: In-Line 2Q w/ Recent Fieldwork Flagging Exit Rate Opportunity; Neutral

研报英文原文证据摘录

Brunswick Corp 2Q Preview: In-Line 2Q w/ Recent Fieldwork Flagging Exit Rate Opportunity; Neutral

industry having reached a market bottom in 2025 following two years of underproduction at

the OEM level and industry unit sales declines annually since the 2020 peak (w/ 2026 unit

growth Flat at a baseline, in our view). Specifically, our work points to a greater level of

“stabilization” in the market today with strength following the mid-June inflection not

seen since the 2016-2018 time period (and notably following Flat BC unit retail sales YTD

through May, by our work). To that point, BC’s retail unit sales growth across FY16-18

averaged ~3.5% annually (vs. the total industry at ~4.5%), with our dealer work supporting

opportunity for the industry to similarly grow low-to-mid-single-digits annually

starting in 2027, translating to opportunity for BC’s retail unit sales to grow at least

+3.5% annually go-forward, in our view. On opportunity, and circling back to our

3/16 Mgmt Meeting Takes from GLR & Leisure Forum, management noted a recapture

of boat units to 145K-150K from ~135K today would equate to +$8-10 in EPS power (or

a doubling of EPS vs. mgmt’s $4.25 FY26 EPS guide mid-point), translating to

opportunity for ~150K boat units by 2029 (i.e. ~135K today at ~3.5% retail unit growth

annually) or the high-end of mgmt’s +$8-10 EPS power range – and notably ~19%

above Consensus at $8.43 in FY29 EPS. Additionally, and representing a potential “next

leg” opportunity, management previously cited the impact of another ~200bps in rate

cuts could translate to a full recapture of demand to 2019 levels (~185K units) equating

to $13-15 in EPS power over the long-term.

Model Implications: We model FY26 EPS of $4.41 (vs. Street $4.40) & FY27 EPS of $5.52

(vs. Street $5.61).