NEW YORK (TheStreet) -- Shares of Winnebago Industries (WGO) are up 3.41% to $24.26 after BMO Capital Markets (BMO) initiated coverage on the company with an "outperform" rating and a $30 price target.
"We believe shares of Winnebgo are inexpensive and think the company is positioned to increase share in a growing RV industry at a rate faster than investors currently expect," said analyst Gerrick L. Johnson.
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 several positive factors, 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, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 13.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- WGO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 48.6% when compared to the same quarter one year prior, rising from $7.66 million to $11.39 million.
- Net operating cash flow has significantly increased by 106.78% to $39.72 million when compared to the same quarter last year. In addition, WINNEBAGO INDUSTRIES has also vastly surpassed the industry average cash flow growth rate of -29.66%.
- WINNEBAGO INDUSTRIES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WINNEBAGO INDUSTRIES reported lower earnings of $1.13 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $1.13).
- You can view the full analysis from the report here: WGO Ratings Report
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