- Evinrude is shut down due to supply chain issues exacerbated by the pandemic, and we aren't too fond of this development given strength in recreation now seen.
- BRP plans to invest $300 million into electric initiatives, which is not a large CAPEX burden but does indicate that powersports might not be immune to electrification burdens.
- ATV displacement is still a risk, and so are rubber shortages, and aluminium issues will remain a problem for their transforming marine business.
- Facility expansion started in 2020 was the right move, as retail growth being limited by capacity issues.
- While BRP has some risks in the medium term, its products are selling like hotcakes and this is not fully reflected in the valuation.
For further details see:
BRP Inc. Has Distinct Risks, But Demand Is Not One Of Them