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Investing.com - Truist Securities lowered its price target on Winnebago Industries (NYSE:WGO) to $36 from $40 on Wednesday while maintaining a Buy rating following the recreational vehicle maker’s fiscal third-quarter results. The stock, currently trading near its 52-week low of $28.29, has declined over 32% in the past six months.
The price target reduction reflects Truist’s lowered financial estimates for fiscal years 2025 through 2027, as Winnebago management expressed caution about the second half of calendar year 2025 due to consumer uncertainty, dealer austerity, and potential tariff headwinds. According to InvestingPro data, 12 analysts have recently revised their earnings estimates downward for the upcoming period.
Despite the cautious outlook, Truist noted that June retail and market share commentary provided "an incremental positive to the story," suggesting some bright spots amid the challenging environment for recreational vehicle sales. The company maintains a strong dividend track record, having paid dividends consistently for 12 years, with a current yield of 4.34%.
Truist acknowledged that a "sustained industry recovery will be needed for shares to move materially higher," indicating that broader market improvements in the RV sector would be necessary for significant stock appreciation.
The firm continues to recommend Winnebago to long-term investors, highlighting that shares are trading at approximately seven times estimated 2026 EBITDA, suggesting the current valuation may present an opportunity despite near-term challenges.
In other recent news, Winnebago Industries reported underwhelming financial results for the third quarter of fiscal 2025. The company posted earnings per share (EPS) of $0.81, which was below the analyst projection of $0.90, and revenue of $775.1 million, slightly missing the expected $779.46 million. In light of these results, Winnebago has lowered its full-year fiscal 2025 guidance for both EPS and revenue, now projecting an EPS range of $1.20 to $1.70 and revenue between $2.7 billion and $2.8 billion. Despite these setbacks, the company noted market share gains in several motorhome categories, suggesting some operational resilience.
The earnings miss has been attributed to a decline in gross margin by 130 basis points to 14.7% and a 140 basis point drop in adjusted EBITDA margin. Winnebago also highlighted ongoing challenges, such as supply chain disruptions and macroeconomic pressures, which could impact future profitability. Additionally, the company is focusing on operational efficiency and cost management to navigate the current market conditions. New product launches are anticipated to drive future growth, with recent introductions in the motorhome and travel trailer segments.
Analysts from firms like Truist Securities and BMO Capital Markets have shown interest in the company’s strategies to improve its motorhome segment and manage inventory effectively. The company has also been recognized by Newsweek as one of America’s most trustworthy companies for the second consecutive year, which underscores its commitment to responsible growth and strong values.
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