Report
Valens Research

LCII - Embedded Expectations Analysis - 2019 10 23

LCI Industries (LCII:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about recent operating margin improvements, their acquisition strategy, and improving market conditions.

Specifically, management is confident the RV industry is in the late stages of inventory correction and that 25% of the RV market will move from manual jacks to electric jacks in 2019. Furthermore, they are confident their recent acquisitions play into their long-term goal to build their European business, and they are confident they have improved operating margin both sequentially and year-over-year. Moreover, they are confident weather-related sales headwinds improved markedly in July.
Underlying
LCI Industries

LCI Industries supplies an array of components for the original equipment manufacturers in the recreation and industrial product markets, consisting of recreational vehicles and adjacent industries including buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; boats; trains; manufactured homes; and modular housing. The company also supplies components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors and service centers. The company's products include steel chassis and related components, axles and suspension solutions, slide-out mechanisms and solutions, and thermoformed bath, kitchen and other products.

Provider
Valens Research
Valens Research

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