PII - Polaris: Challenging Operating Conditions Persist Through Q4

2024-02-05 03:23:34 ET

Summary

• Weaker recreational trends and higher promotional activity weighed on Polaris during the Q4 reporting period.
• The powersport vehicle company also reported higher product liability costs and negative dealer sentiment.
• The operating challenges contributed to weaker than expected results and the release of underwhelming guidance for 2024.
• I remain neutral on shares of PII due primarily to the weaker discretionary consumer environment and the limited signs of any reversal in this weakness.

Powersport vehicle company, Polaris ( PII ), was recently upgraded by analysts at Morgan Stanley ( MS ) with an "overweight" rating due to its attractive risk-reward profile. The upgrade came just prior to the company’s Q4 earnings release. While I believe PII can rise to Morgan Stanley’s $113/share price target over time, it may take much longer than desired for most investors....

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