The firm said it lowered its rating on the company, which manufactures and sells a variety of recreation vehicles and small to mid-size buses in North America, as it believes Thor will continue to see margin pressure.
"While demand trends still appear quite strong, we are downgrading the shares because we are concerned that the company will continue to see gross margin pressure for the foreseeable future, mainly from rising labor costs," BMO said.
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"Unlike potential pressure from changes in materials costs, currencies, or discounting, which may come and go, we think the labor issue is more a structural one that does not look like it will alleviate anytime soon," BMO added.
The firm cut its price target on Thor Industries to $54 from $62.
Separately, TheStreet Ratings team rates THOR INDUSTRIES INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate THOR INDUSTRIES INC (THO) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."