NEW YORK (TheStreet) -- Winnebago Industries(WGO) - Get Report stock is nearly flat at $23.95 in early morning trading Wednesday after BMO Capital Markets increased its price target to $27 from $25, while maintaining its "outperform" rating.
Winnebago Industries is a manufacturer of recreation vehicles (RVs) used primarily in leisure travel and outdoor recreation activities.
Winnebago has been benefiting from strong consumer demand for recreational vehicles, analysts said.
"We think Winnebago is better positioned to outperform investor expectations owing to its broader exposure to the faster-growing motor home segment of the market and its ability to mitigate margin pressure from rising labor costs owing to pricing power given its strong brand name, compelling and unique product line, and reputation for quality," the firm noted.
Over the next several quarters analysts said they expect this valuation and performance gap to narrow, likely beginning with tomorrow's 2015 second quarter financial results.
BMO anticipates fiscal year earnings of $1.70 per share for 2015, and $2 per share for 2016.
Separately, TheStreet Ratings team rates WINNEBAGO INDUSTRIES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate WINNEBAGO INDUSTRIES (WGO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
You can view the full analysis from the report here: WGO Ratings Report