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Wednesday, Polaris Industries (NYSE:PII) stock maintained its Sector Weight rating from KeyBanc following the release of the company’s fourth-quarter earnings. Polaris, which boasts a notable 5.14% dividend yield and has maintained dividend payments for 38 consecutive years according to InvestingPro, reported higher than anticipated top and bottom-line results, but provided full-year 2025 adjusted earnings per share (EPS) guidance of approximately $1.10, which falls short of the roughly $2 to $2.25 expected by investors, according to KeyBanc.
The company’s guidance does not account for any potential changes in regulatory policies. This omission is notable given Polaris’ significant business dealings with Mexico and China, which could be affected by tariff changes. For the year 2025, Polaris anticipates a continuation of the challenging retail environment, estimating a low single-digit decline. The stock has already experienced significant pressure, falling 36.82% over the past six months and currently trading near its 52-week low of $51.17. This decline is expected to put additional pressure on both revenue and earnings, particularly in the first quarter due to inventory management strategies and tough comparisons to previous year shipments of certain models.
Despite the lower earnings guidance, Polaris management intends to maintain the company’s dividend in FY25. They have described the industry challenges as short-term, citing healthy fundamentals such as ridership and stable used inventory levels. KeyBanc analysts, while acknowledging the company’s outlook, expressed a broad sense of caution in their coverage of the leisure vehicle sector.
Polaris is currently trading at approximately 19 times KeyBanc’s estimated FY26 EPS, which is at the upper end of its historical price-to-earnings range of 10 to 20 times. Given this valuation and the outlined concerns, KeyBanc reiterated its Sector Weight rating on Polaris shares, signaling a neutral stance on the stock’s investment potential at this time.
In other recent news, Polaris Industries has been the subject of several analyst reports. Citi lowered their price target on Polaris stock to $53 from $57, maintaining a neutral rating. This decision came after Polaris revised its 2025 financial outlook downwards, triggering concerns over the potential impact of additional tariffs on the company’s financials.
On the other hand, Polaris reported strong fourth-quarter results, with earnings and revenue surpassing 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. Raymond (NSE:RYMD) James analyst Joseph Altobello maintained a Market Perform rating on Polaris, noting the company’s mixed results but overall alignment with analyst expectations.
Despite the strong earnings, Polaris saw challenges in its retail segment, with North American retail sales, excluding snow and youth products, declining 7% year-over-year. Looking ahead, Polaris has outlined 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 the recent developments concerning Polaris Inc.
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