Polaris Inc Guide Seems Conservative Given Retail Trends

研报英文原文证据摘录

Polaris Inc Guide Seems Conservative Given Retail Trends

Forecast returns

Forecast price appreciation -10.3%

Forecast dividend yield 3.7%

Forecast stock return -6.6%

Market return assumption 9.3%

Forecast excess return -15.9%

Company Description

Polaris Industries Inc. is a leading manufacturer of powersports products, having evolved from

a snowmobile manufacturer since 1954, into a leading manufacturer of all-terrain

recreational and utility off-road vehicles (ORVs) that include ATVs and side-by-sides,

snowmobiles, and on-road vehicles such as motorcycles (with a presence in the heavyweight

cruiser and touring motorcycle markets) and small vehicles (including small electric/hybrid

powered vehicles). Off-road vehicles make up close to 50-60% of PII's top line.

Valuation Method and Risk Statement

Risks for the Powersports industry, including Polaris, center predominantly around

macroeconomic factors and competitive pressures, as the Powersports purchases are sensitive

to economic cyclical conditions. A macro slowdown could affect sales for the industry overall,

affecting the company’s ability to get pricing/returns. Weak economic conditions could result

in deterioration in credit lending, which could potentially negatively impacting consumers

who purchase powersports products. The Powersports business is subject to impact from

weather conditions as well. Sales of motorcycle, ATVs, side-by-side vehicles are highly

sensitive to weather conditions as are snowmobiles and watercraft vehicles, as unfavorable

weather may materially reduce demand and adversely impact sales of powersports products.

A lack of snowfall during the winter or excessive rainfall in the summer could both materially

decrease the company’s profitability.