Brunswick Is Sailing Against Headwinds, Analyst Sees Weak Outlook

Raymond James analyst Joseph Altobello downgraded Brunswick Corp BC to Market Perform from Outperform and removed the prior price target of $79.

The analyst's re-rating reflects the continued steady decline in the sales of new powerboats in the U.S. since COVID.

The analyst says this was due to a lack of inventory, given supply chain constraints, affordability challenges, and overall macroeconomic uncertainty. 

Altobello expects BC's Boat segment to tackle a mid-single-digits headwind from the industry's aggressive restocking inventory in 2024 (mostly H1).

The analyst estimates adjusted EPS of $9.00 in 2023 (in line with current guidance issued in late October) and $8.75 in 2024.

Altobello projects the headwinds to make it difficult for the company to deliver meaningful earnings growth in the coming year amid the current choppy demand environment and lack of visibility.

Price Action: BC shares are trading lower by 1.03% at $89.07 on the last check Thursday.