Stifel raises BRP Inc. stock rating to Buy, price target to Cdn$68

On Friday, Stifel Canada analysts upgraded BRP Inc . (TSX:DOO:CN) (NASDAQ:DOOO) stock from Hold to Buy, significantly raising the price target to Cdn$68.00 from the previous Cdn$49.00. The upgrade comes despite BRP Inc. reporting a decline in sales for the first quarter of fiscal year 2026, marking the seventh consecutive quarter of such a trend. Nevertheless, analysts at Stifel anticipate an end to this downward trajectory, with expectations of sales growth in the second quarter of fiscal year 2026.

The analysts’ optimism is rooted in an improving outlook for BRP Inc., which they believe could lead to revenue increases year-over-year in each of the next three quarters. Additionally, they forecast growth in EBITDA margins and earnings per share in the second half of fiscal year 2026. The company is poised for a return to growth mode, as it has nearly completed its inventory depletion and is entering periods with easier year-over-year comparisons.

Stifel’s analysts also pointed out that the risk of tariffs becoming a long-term issue for BRP Inc. has significantly diminished. This alleviation of tariff concerns, combined with a compelling valuation at 6 times forward EBITDA—a discount of 35% compared to competitor Polaris (NYSE:PII)’ forward consensus—contributed to the decision to upgrade the stock rating.

The valuation presents an attractive entry point for investors, with BRP Inc.’s stock currently trading at a substantial discount. The company’s anticipated return to growth, despite broader industry challenges, positions it favorably in the eyes of Stifel analysts. They expect BRP Inc. to outperform given the context of its mostly completed inventory adjustments and the easing of comparable periods ahead.

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