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Wednesday saw RBC Capital Markets adjusting its outlook on Polaris Industries (NYSE:PII), as the firm’s analyst Sabahat Khan set a new price target for the company’s stock. The target has been reduced to $54 from the previous $65, while the Sector Perform rating remains unchanged.
Khan’s analysis came after Polaris reported its fourth-quarter results, which aligned with the general expectations of Wall Street. However, the company’s guidance for adjusted EBITDA and EPS in 2025 fell short of the consensus. Despite these challenges, the company maintains a notable 5.14% dividend yield and has maintained dividend payments for 38 consecutive years, according to InvestingPro data. The analyst pointed out that Polaris is poised for a potential uptick in the latter half of 2025, but the immediate future holds certain challenges.
The forecast for Polaris suggests a year of transition, with the first half of 2025 expected to face continuous headwinds. Khan’s commentary highlighted these near-term challenges as a reason for maintaining a cautious stance on the stock.
The revised price target reflects an $11 decrease from the prior target, indicating a recalibration of expectations for Polaris’ stock performance. Despite this adjustment, the Sector Perform rating suggests that the analyst does not see significant underperformance or outperformance relative to the industry.
In summary, RBC Capital Markets acknowledges the potential for Polaris Industries to improve in the second half of 2025, but the anticipated difficulties in the near term have led to a lowered price target for the company’s shares. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which covers what really matters for smarter investing decisions.
In other recent news, Polaris Industries reported robust fourth-quarter 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. 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 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. However, Polaris 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.
Furthermore, 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. Additionally, 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. These are recent developments concerning Polaris Inc.
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