WGO - Embedded Expectations Analysis - 2021 01 25
Winnebago Industries, Inc. (WGO:USA) currently trades well below corporate averages relative to Uniform earnings, with a 9.8x Uniform P/E. At these levels, the market has overly bearish expectations for the firm. Despite management's concerns about the demand for RVs, supply chain headwinds, and Newmar vendor challenges, given demographic tailwinds and higher profitability businesses, equity upside remains warrantedSpecifically, may have concerns about the sustainability of retail RV demand, Newmar vendor challenges, and volatility in work-in-process inventory. In addition, they may lack confidence in their ability to mitigate supply chain headwinds, control their wholesale shipment levels, and sustain organic revenue growth. Furthermore, they may lack confidence in their ability to upgrade their dealer network and expand Winnebago Towable into new markets
Despite management's concerns about the demand for RVs, supply chain headwinds, and Newmar vendor challenges, given the firm's demographic tailwinds and movement into higher profitability product lines, market expectations are still far too bearish
Winnebago Industries is a manufacturer with a portfolio of recreation vehicles and marine products used primarily in leisure travel and outdoor recreation activities. The company's reportable segments include: Towable, which is comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services; and Motorhome, which is comprised of products that include a motorized chassis as well as other related manufactured products and services. The company's subsidiary, Chris-Craft USA, Inc., manufactures and sells boats in the recreational powerboat industry through a network of independent authorized dealers.
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