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On Thursday, DA Davidson analysts raised the price target for REV Group (NYSE:REVG) stock to $51 from $39, while maintaining a Buy rating. The revision follows the company’s fiscal second-quarter earnings, which surpassed expectations. The stock, currently trading at $43.76, has shown impressive momentum with a 34.98% gain year-to-date and is approaching its 52-week high of $44.62.
The analysts noted that REV Group not only exceeded earnings expectations but also increased its EBITDA forecast for the fiscal year 2025, despite challenges from tariffs. The company has shown strong confidence in its fiscal year 2027 guidance, aiming for $310 million in EBITDA, up from a $210 million midpoint in fiscal year 2025. This represents significant growth from the current EBITDA of $175.1 million.
REV Group’s backlog and visibility into pricing and margins, particularly in its Specialty segment, are seen as key factors supporting the company’s optimistic outlook. The analysts believe that the stock will continue to receive a favorable valuation due to these factors.
The analysts also mentioned that challenges in the Recreation segment are not expected to persist for the next two years, which further supports the positive outlook for the company.
In other recent news, REV Group Inc. reported impressive financial results for the second quarter of fiscal year 2025, with earnings per share reaching $0.70, surpassing the forecasted $0.55. The company’s revenue also exceeded expectations, totaling $629.1 million against the anticipated $603.5 million. Significant growth was observed in the Specialty Vehicles segment, which saw a 12.2% increase in sales. In strategic moves, REV Group announced its exit from the non-motorized travel trailer business. Additionally, the company provided an updated full-year revenue guidance of $2.35 billion to $2.45 billion, with adjusted EBITDA expected to range from $200 million to $220 million. Analyst firm D.A. Davidson noted the company’s proactive measures in managing the impact of tariffs, estimating a $5 million effect on the RV segment and $10 million on Specialty Vehicles. The company’s strategic initiatives include increased capital expenditure guidance to support ongoing investments in production capacity and innovation.
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