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On Wednesday, DA Davidson analyst Brandon Rolle revised the price target for Polaris Industries (NYSE:PII) shares, reducing it to $60 from the prior target of $69, while sustaining a Buy rating on the stock. The adjustment follows Polaris Industries’ release of its fiscal year 2025 guidance, which did not meet the expectations of Wall Street analysts. According to InvestingPro data, seven analysts have recently revised their earnings estimates downward, with the stock currently trading at $48.78, significantly below its 52-week high of $100.91.
Polaris Industries’ stock experienced a decline after the company presented its FY25 outlook, which was significantly lower than what market analysts had anticipated. The stock has fallen nearly 37% over the past six months, with InvestingPro analysis suggesting the stock is currently undervalued based on its Fair Value calculations. Rolle noted that this underperformance was in line with their expectations before the fourth-quarter 2024 ORV Checks were reported. According to Rolle, until the market fully adjusts its expectations to include the impact of tariffs, there is no pressing need to own shares of Polaris Industries, though income-focused investors might note the company’s impressive 5.14% dividend yield and 28-year history of consecutive dividend increases.
Despite the lowered guidance, Rolle reiterated the Buy rating, suggesting that any positive changes in the company’s underlying fundamentals could lead to gains beyond the initial FY25 projections. The new price target of $60 is derived from a price-to-earnings (P/E) ratio of 15.0 times the forecasted fiscal year 2026 earnings per share (EPS) of $4.00, which represents a decrease of $1.45 from the consensus EPS estimate of $3.28. For deeper insights into Polaris Industries’ valuation metrics and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive financial health scores and over 30 additional premium insights.
The analyst emphasized that while the current guidance may have disappointed investors, the potential for improvement in the company’s core business could provide an opportunity for the stock to surpass the preliminary FY25 guidance. This outlook supports the decision to maintain a positive rating on Polaris Industries’ shares despite the reduction in the price target.
In other recent news, Polaris Industries reported robust fourth-quarter earnings and revenue that surpassed analyst expectations. The powersports vehicle manufacturer posted adjusted earnings per share of $0.92, beating the consensus estimate of $0.90, and revenue of $1.755 billion, exceeding expectations of $1.68 billion. However, Polaris provided full-year 2025 adjusted earnings per share (EPS) guidance of approximately $1.10, falling short of the roughly $2 to $2.25 expected by investors, according to KeyBanc.
RBC Capital Markets adjusted its outlook on Polaris Industries, reducing the price target to $54 from the previous $65, while maintaining a Sector Perform rating. Similarly, Citi lowered their price target on Polaris stock to $53 from $57, maintaining a neutral rating. These revisions came after Polaris revised its 2025 financial outlook downwards.
Despite these adjustments, Polaris Industries plans to achieve approximately $40 million in structural cost savings by 2025 through lean initiatives and a 10% reduction in variable costs at its plants compared to 2024. These are recent developments concerning Polaris Industries.
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