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JPMorgan analysts told investors in a note that the firm sees a multi-year “U-shaped” top-line recovery for BC, not a “V-shape.”
“Driving the ‘U-shaped’ recovery by our work is the combination of flattish retail boat unit demand and wholesale in FY24 planned down double digits (= 1:1 with retail demand or ~28-29K wholesale units) with our fieldwork flagging increasingly cautious dealer sentiment into 2H23 driven by (i) elevated inventory levels notably in the value-segment, (ii) delayed consumer purchases on higher interest rates, and (iii) greater reliance on incentives to drive conversion,” the analysts explained.
“On Propulsion, we see +low-single-digit revenue growth in FY24 with a decline in value-segment engines (similar to boat production expectations), offset by continued demand at 175hp+ engine cohorts noting our +3.4% consolidated BC revenue growth estimate in FY25 represents a “best case” scenario reflecting macro stability and lower interest rate backdrop,” they added.
The firm reduced its FY24 EPS forecast for BC to $9.48 (below the consensus $10.25) and FY25 EPS forecast to $10.06.
