BC - Boating stocks likely to remain 'dead money' in the near term - Truist

While he noted that bullish long term theses for many boating stocks remain intact, Truist analyst Michael Swartz advised clients to be patient with the space.

“We believe many of the marine stocks will remain ‘dead money’ at best in the [near term] as investors continue to assess the probability and length/depth of a potential recession,” he told clients on Friday.

To be sure, Swartz was more optimistic on improving inventory positions and easing comps as factors proving some upside for favored names like Brunswick Corporation ( NYSE: BC ) and Malibu Boats ( NASDAQ: MBUU ). However, even these “Buy” rated names have limited upside until the macro picture improves, he explained.

“While surprisingly resilient demand of late (particularly given inventory challenges), robust backlogs into [the second half of 2022] and moderating supply pressures portend a solid 2Q reporting season, we believe it prudent to trim 12-month expectations given a slowing macro/consumer backdrop and growing concerns around pricing/margins,” Swartz advised.

Price target cuts and ratings were assigned as follows:

• Brunswick Corporation ( BC ): Buy Rated, Price Target: $110 ? $95
• Malibu Boats, Inc. Class A ( MBUU ): Buy Rated, $80 ?  $70
• MarineMax, Inc. ( NYSE: HZO ): Buy Rated $54 ? $48
• Mastercraft Boat Holdings, Inc. ( NASDAQ: MCFT ): Hold Rated, $25 ? $22
• OneWater Marine Inc ( ONEW ): Buy Rated, $48 ? $42

Read more on recent powerboat sales trends .

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