Citi lifts BRP Inc. stock rating to Neutral, target to Cdn$52

On Friday, Citi analyst Shawn Collins raised the stock rating for BRP Inc . (TSX:DOO:CN) (NASDAQ: DOOO) from Sell to Neutral, significantly increasing the price target from Cdn$39.00 to Cdn$52.00. The upgrade comes as the stock trades near its 52-week low of $33.05, having declined over 40% in the past six months. According to InvestingPro analysis, BRP (NASDAQ:DOOO) appears undervalued at current levels, with strong fundamentals including $5.4 billion in revenue. Collins highlighted the favorable position of BRP in the current tariff landscape, noting that the company’s supply chain setup has avoided serious tariff implications for now.

BRP Inc. , primarily a Canadian company, conducts most of its manufacturing in Mexico and directs a substantial portion of its sales to the U.S. market. According to Collins, the potential tariffs on Mexico and Canada, which could have posed a severe threat to BRP, seem to be put on hold, which benefits the company’s operational framework under the USMCA trade agreement. InvestingPro data reveals that management has been actively supporting shareholder value through aggressive share buybacks, while maintaining dividend payments for nine consecutive years.

The analyst pointed out that BRP’s competitors, many of whom import a significant volume of their products from China and Japan into the U.S., were hit harder by tariff impositions this past Wednesday. This situation has ostensibly allowed BRP to avoid what Collins termed as a "potentially existential threat."

Furthermore, Collins suggested that BRP might now be in a position to gain price and margin advantages in its primary market, the United States. This advantage comes as its competitors grapple with the challenges posed by the new tariff structures that favor USMCA-compliant products like those of BRP.

The updated price target of Cdn$52.00 reflects a more optimistic outlook for BRP’s shares, considering the company’s resilience in the face of international trade tensions and its potential to capitalize on the current market dynamics. Collins’ commentary underscores the significance of supply chain strategies in navigating the complex tariff environment and BRP’s success in this regard.

In other recent news, BRP Inc. has reported earnings for the fourth quarter of 2025 that exceeded analyst expectations, despite a year-over-year decline in some financial metrics. The company’s normalized earnings per share (EPS) was C$0.98, surpassing both Raymond (NSE:RYMD) James’ estimate of C$0.79 and the consensus of C$0.82. Additionally, BRP’s normalized EBITDA for the quarter was C$240 million, above the Raymond James projection of C$236 million and the market consensus of C$237 million. Analysts have adjusted their ratings and price targets for BRP, reflecting various outlooks on the company’s future performance amidst economic challenges.

Raymond James maintained a Strong Buy rating but reduced the price target to Cdn$65.00, citing retail headwinds and tariff concerns. DA Davidson also kept a Buy rating but lowered its price target to Cdn$70.00, considering the company’s strategic inventory management and external factors affecting earnings potential. BMO Capital Markets reduced its price target to Cdn$70.00 while maintaining an Outperform rating, noting the deferral of FY2026 guidance due to uncertainties around tariffs and consumer demand. Citi downgraded BRP to a Neutral rating and cut the price target to Cdn$70.00, expressing concerns over potential tariffs impacting profitability.

These developments highlight the varied analyst perspectives on BRP’s ability to navigate the current economic landscape and the potential impact of tariffs on its operations.

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