2023-04-04 12:21:19 ET
BRP Inc. ( NASDAQ: DOOO ) was cut to Neutral on Tuesday as DA Davidson advised clients that recent channel checks revealed weaker than expected demand trends.
Equity analyst Brandon Rolle indicated rising interest rates are influencing purchasing habits. Dealers also told his team that Polaris ( PII ) is pursuing an aggressive promotional strategy that includes accommodative financing options. BRP ( DOOO ) has yet to match Polaris’ promotions as of yet, according to conversations with dealers.
“Although BRP has one of the best management teams in our coverage list, our checks lead us to believe ORV market share dynamics may be changing, which could limit upside to FY24 EPS guidance,” Rolle wrote. “From conversations with our dealer contacts, we estimate March ORV retail sales were relatively in-line to slightly weaker than what dealers experienced in February. The trajectory of March retail sales left many dealers concerned given that retail usually accelerates during March and dealers have ample inventory.”
Rolle cut his rating on BRP to Neutral from Buy and lowered his price target to $111 from $125. Shares of BRP Inc. ( DOOO ) slipped about 3% in afternoon trading on Tuesday.
Read more on the Canadian powersports manufacturer’s latest earnings results .
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BRP downgraded as DA Davidson eyes soft retail trends, Polaris promotions