REV Group stock rating reiterated at Buy by DA Davidson

Investing.com - DA Davidson has reiterated a Buy rating on REV Group (NYSE:REVG), though the price target was not specified in the analyst note. The company, currently trading near its 52-week high of $53.74, has delivered impressive returns with a 79.52% gain over the past year and maintains a GREAT financial health score according to InvestingPro data.

The firm’s analysis focused on July’s recreational vehicle chassis data, which showed industry RV chassis orders increased 179% year-over-year, albeit compared to a very low base period. Production also rose 71% during the same timeframe.

Despite these positive indicators, DA Davidson noted that inventories continue to climb to new record levels as the summer season concludes, which the firm does not view as promising for the industry.

The analyst suggested that current chassis activity might be a positive indicator for next year’s RV industry performance rather than immediate results.

DA Davidson views industry troughs as beneficial and complementary to REV Group’s Fire business segment, which the firm believes has "multiple years of growth" ahead.

In other recent news, REV Group reported impressive financial results for the second quarter of fiscal year 2025. The company achieved earnings per share of $0.70, surpassing the forecasted $0.55, and revenue reached $629.1 million, exceeding the anticipated $603.5 million. Following these results, DA Davidson raised its price target for REV Group stock to $51 from $39 and maintained a Buy rating. The analysts noted the company’s increased EBITDA forecast for fiscal year 2025 and its strong confidence in achieving $310 million in EBITDA by fiscal year 2027. Additionally, Morgan Stanley (NYSE:MS) upgraded REV Group’s stock rating from Underweight to Equalweight, citing improved operational efficiency and robust product demand. In another development, REV Group announced the promotion of Linas Polteraitis to chief supply chain officer. Polteraitis, who joined the company in September 2023, will continue to report to CEO and President Mark Skonieczny. These developments reflect the company’s strategic advancements and positive market outlook.

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