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TheStreet Open House

Will This Price Target Increase Help Polaris Industries (PII) Stock Today?

Story updated at 9:50 a.m. to reflect market activity.

NEW YORK (TheStreet) -- UBS raised its price target for Polaris Industries (PII) to $149 from $142 Thursday.

Polaris Industries fell -2.4% to $128.37 in morning trading.

The firm reiterated its "buy" rating for the stock. UBS analysts Robin M. Farley and Arpine Kocharyan said the increase was driven by a ramp up of Indian motorcycle dealers and Polaris adding production capacity for ACE.

"Polaris reiterated its guidance for motorcycle shipments to be up 65-75% on a FY basis, so Q1 is below that run rate but given the increase in dealers as we move through the year, & seasonality of bike sales, it is reasonable to expect to see much higher increases in Q2 and Q3," the analysts wrote.

Must read: Warren Buffett's 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates POLARIS INDUSTRIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate POLARIS INDUSTRIES INC (PII) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, notable return on equity, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 19.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • POLARIS INDUSTRIES INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, POLARIS INDUSTRIES INC increased its bottom line by earning $5.40 versus $4.40 in the prior year. This year, the market expects an improvement in earnings ($6.50 versus $5.40).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Leisure Equipment & Products industry and the overall market, POLARIS INDUSTRIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the Leisure Equipment & Products industry average, but is less than that of the S&P 500. The net income increased by 7.2% when compared to the same quarter one year prior, going from $75.46 million to $80.90 million.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: PII Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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