Camping World Holdings (CWH) - Get Report shares on Tuesday were higher after a J.P. Morgan analyst upgraded the recreational-vehicle company to overweight from neutral, saying it should continue to benefit as consumers look for a safer form of travel during the coronavirus pandemic.
Shares of the Lincolnshire, Ill., company at last check jumped 14% to $34.87.
Analyst Ryan Brinkman, who raised his price target to $40 from $30, said in note to clients that Camping World "should continue to benefit from demand tailwinds in the wake of covid-19 as consumers look to travel in such a way as to avoid contraction of the virus."
"With over one hundred dealership locations, Camping World is by far the largest player in the fragmented market for new and used RV sales and supplies," Brinkman said.
The analyst said that Camping World’s scale gives it numerous benefits relative to its smaller competitors.
These include volume discounts, which widen gross-profit margins; more favorable terms with financing sources; and a wider assortment of offerings to consumers, available across its greater number of stores.
"Our checks suggest that the momentum seen in new RV sales during the second quarter has very much carried over into the third quarter," Brinkman said.
The coronavirus pandemic shutdown has devastated the travel industry, with airlines, cruise -ship operators and hotel chains all suffering as people stay home.
The RV Industry Association recently reported that its monthly survey of manufacturers found that total recreational vehicle shipments ended July at 43,035 units, up 54% from a year earlier and the highest July shipment numbers in four decades.