KeyBanc bullish on ONEW in the long-term, reiterates Overweight stock rating

On Thursday, KeyBanc Capital Markets maintained its Overweight rating on OneWater Marine Inc. (NASDAQ: NASDAQ:ONEW) with a steady price target of $29.00. The firm's analysts held meetings with OneWater's CEO Austin Singleton and CFO Jack Ezzell, which led to a continued positive outlook for the company's long-term opportunities.

The company acknowledged a slowdown in the marine retail sector as the selling season winds down. This trend aligns with KeyBanc's expectations and recent retail data. Despite the industry's sluggish retail performance, analysts are optimistic about OneWater Marine's potential, citing several factors that could contribute to its growth.

OneWater Marine's robust inventory position was highlighted as a key strength. Additionally, the company has identified cost-reduction strategies and a long-term growth trajectory. This growth is expected to be driven by mergers and acquisitions, along with an expansion of its used boat and service segments.

The analysts believe these elements position OneWater Marine favorably for the fiscal year 2025 and beyond. They have confidence in the company's ability to navigate the current market challenges and capitalize on the opportunities that lie ahead.

In other recent news, OneWater Marine Inc. reported fiscal third-quarter earnings for 2024, which did not meet expectations due to a decline in sales. The sales drop was primarily due to unfavorable weather conditions in Texas and an overall industry downturn. Despite a 23% sales decrease in June and a 15% drop for the quarter, the company indicates that July sales are demonstrating signs of stability.

In response to these market conditions, OneWater Marine has revised its full-year outlook, anticipating mid-single-digit decreases in unit sales and same-store sales. However, the company's management, including CEO Austin Singleton, remains confident in future growth, emphasizing ongoing efficiency measures and an active M&A strategy.

Although no formal guidance was provided for fiscal 2025, the company's decisions are expected to position it for profitable growth in that year. This optimism is bolstered by improved sales trends in July, suggesting a potential market recovery. OneWater Marine is focusing its strategy on inventory management, cost optimization, and capital allocation, with an active M&A pipeline.

InvestingPro Insights

According to the latest data from InvestingPro, OneWater Marine Inc. (NASDAQ: ONEW) is navigating the waters with a market capitalization of approximately $352.22 million. Despite the challenges in the marine retail sector, the company's net income is expected to grow this year, which may reassure investors looking for signs of resilience and potential profitability. This forward-looking optimism is supported by the InvestingPro Tips, which also indicate that analysts predict the company will turn profitable within the year.

However, potential investors should be aware of the company's significant debt burden and the high price volatility of its stock. In the last twelve months, OneWater Marine has not been profitable, and the stock has experienced a notable decline over the past month. These factors suggest that while there may be growth on the horizon, there is also a degree of risk associated with the company's financial performance and stock stability.

For those considering an investment in OneWater Marine, it's worth noting that the company does not pay dividends to shareholders at this time. This detail, along with other valuable insights, can be found among the additional tips listed on InvestingPro, which includes a comprehensive analysis of the company's financial health and stock performance. To delve deeper into these metrics and tips, interested parties can visit the InvestingPro platform for further information.

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