Raymond James cuts BRP Inc. price target to Cdn$65, keeps strong buy

On Wednesday, Raymond (NSE:RYMD) James made a significant adjustment to the price target for BRP Inc . (TSX:DOO:CN) (NASDAQ: DOOO), bringing it down from Cdn$98.00 to Cdn$65.00. The adjustment comes as the stock trades near its 52-week low of $35.54, having declined over 40% in the past six months. Despite the reduction, the firm has maintained a Strong Buy rating on the stock, signaling continued confidence in the company’s performance potential. According to InvestingPro analysis, BRP (NASDAQ:DOOO) appears undervalued at current levels.

The revision in BRP’s price target comes amidst a challenging period characterized by retail headwinds and tariff concerns. The company maintains a solid financial foundation with a current ratio of 1.37 and has demonstrated its commitment to shareholder returns, maintaining dividend payments for eight consecutive years. According to Raymond James, BRP’s ability to gain further market share in the off-road vehicle (ORV) sector, coupled with the expansion of the three-wheeled vehicle (3WV) market, positions it well for future success.

The Strong Buy rating from Raymond James reflects an optimistic outlook on BRP’s shares. The firm believes that the company’s strengths, including its strategic growth initiatives and solid execution track record, will allow it to effectively manage the current retail and tariff challenges.

In the statement provided by Raymond James, the analyst highlighted BRP’s valuation as attractive, based on the company’s earnings power. This assessment suggests that, despite the price target reduction, the firm sees substantial value in BRP’s stock at the revised target.

BRP Inc. , known for its powersports vehicles, engines, and propulsion systems, has established a reputation for innovation and market leadership. Its diverse product lineup, which includes Ski-Doo snowmobiles, Sea-Doo watercraft, and Can-Am off-road vehicles, has contributed to its strong market presence.

In other recent news, BRP Inc. reported fourth-quarter earnings that exceeded analyst expectations, despite a significant year-over-year decline. The company’s normalized earnings per share (EPS) was C$0.98, surpassing the Raymond James estimate of C$0.79 and the consensus of C$0.82. BRP’s normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) reached C$240 million, slightly above market expectations. However, the company has decided to defer providing future guidance due to uncertainties surrounding tariffs, reflecting caution in an unpredictable economic environment.

In another development, Citi analysts downgraded BRP’s stock from Buy to Neutral, adjusting the price target from Cdn$90.00 to Cdn$70.00. This decision was influenced by concerns over potential tariffs that could impact profitability, especially if there is a second Trump administration. The analysts highlighted that BRP and similar companies have not taken significant actions to mitigate these potential impacts. The downgrade underscores the risks associated with the tariff discussions and the challenges BRP might face in maintaining profitability.

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