Bank of America just raised its EUR/USD forecast
On Wednesday, Citi analysts downgraded Thor Industries Inc. (NYSE:THO) stock from Buy to Neutral and reduced the price target to $86 from $94, adding to a challenging period for the company whose stock has declined over 20% in the past year. According to InvestingPro data, 12 analysts have recently revised their earnings expectations downward for the upcoming period. The downgrade is attributed to the RV industry’s retail unit trends, which are described as solid but not exceptional. Analysts at Citi expect the industry to continue to struggle until there is a significant change in interest rates or a more confident consumer outlook.
Thor Industries, a recreational vehicle (RV) manufacturer, is facing pressure on profit margins, necessitating promotions to counter affordability issues, especially in the motorized segment. The company’s gross profit margin stands at 14.2%, reflecting these challenges. InvestingPro analysis indicates that weak gross profit margins remain a key concern for investors. This segment hasn’t benefited from lower average selling prices due to persistent high chassis costs. Citi also expressed caution regarding Thor’s ability to gain market share in the future, noting persistent share losses and margin challenges associated with efforts to regain lost share.
The analysts reflected on their previous upgrade of Thor Industries a year prior, when the company was seen as highly responsive to interest rate cuts and a potential soft-landing economic scenario. However, RV rates did not decrease as expected, and recent reductions in 2025 have coincided with growing consumer concerns, increasing the likelihood of an economic downturn.
Thor’s recent quarterly earnings revealed a trade-off between volume and margin as the company sought to reclaim its share in the towables market. The performance in the motorized and European segments was also disappointing, with high promotional activity required to stimulate sales.
Citi’s report includes an updated industry model and company estimates, suggesting that Thor Industries may not present a compelling story for the remainder of fiscal year 2025. However, the firm suggests revisiting the stock in fiscal year 2026, when there might be more clarity on interest rate cuts, market share stability, and the intensity of promotions. Based on InvestingPro’s Fair Value analysis, the stock currently appears undervalued. For deeper insights into Thor Industries’ valuation and 12 additional ProTips, including the company’s 39-year track record of maintaining dividend payments, subscribers can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Thor Industries reported earnings for the second quarter of fiscal year 2025 that fell short of market expectations, leading the company to revise its full-year guidance downward. This earnings miss and guidance adjustment prompted several analyst firms to reassess their outlooks on the company. DA Davidson lowered its price target for Thor Industries to $80, citing a challenging retail demand outlook and reduced earnings per share guidance. Similarly, BMO Capital Markets reduced its price target to $105, maintaining an Outperform rating but noting macroeconomic concerns impacting the company’s projections.
Truist Securities also adjusted its price target from $110 to $90 while maintaining a Hold rating, reflecting a cautious view on the speed of earnings recovery. KeyBanc Capital Markets maintained a Sector Weight rating, pointing out that despite higher towable shipments, the revised EPS guidance was seen as unfavorable. Benchmark retained a Hold rating, highlighting uncertainties in the European market and pressures in Thor Industries’ Motorized segment.
These recent developments underscore the challenges Thor Industries faces amid economic uncertainties and shifting market dynamics. Analysts are observing how the company navigates these conditions, with some suggesting potential catalysts like demand rebounds could alter their perspectives. As the company revises its strategies, investors are closely watching for signs of stabilization in demand within the RV market.
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