Winnebago Crushes 2Q Estimates On Strong Consumer Demand

Winnebago Industries reported stellar 2Q results with revenues and earnings that topped Street estimates and marked significant year-over-year improvements.

Winnebago’s (WGO) 2Q revenues jumped 34% to $839.9 million year-on-year and surpassed analysts’ expectations of $798.2 million. Adjusted earnings of $2.12 per share came in well ahead of consensus estimates of $1.42 and increased 216.4% year-over-year.

The outdoor lifestyle product manufacturer’s quarterly results were primarily driven by strong end consumer demand for its products.

Gross margins improved 590 basis points from the year-ago quarter driven by higher pricing, operating leverage, lower discounts and allowances, favorable segment mix, and productivity initiatives at the Motorhome segment. (See Winnebago stock analysis on TipRanks)

Winnebago CEO Michael Happe said, “We are pleased with the outstanding market and financial results from our second quarter of fiscal 2021, as they reflect the sustained strength of our leading brand portfolio and our world-class team’s commitment to safely deliver high-quality products to our valued dealer network.”

Last month, Wedbush analyst James Hardiman raised the stock’s price target to $77 (7.8% upside potential) from $70 and reiterated a Buy rating. In a note to investors, Hardiman stated that during an investor call, the company reaffirmed all the positive commentary it had given during its 1Q earnings call and expects the continuation of strong trends across the business into 2Q.

Overall, the Street has a Strong Buy consensus rating on the stock based on 5 unanimous Buys. The average analyst price target of $83.20 implies upside potential of around 16.5% to current levels. Shares have gained over 225% over the past year.

On TipRanks’ Smart Score ranking, WGO gets a 9 out of 10, suggesting that it is likely to outperform market expectations.