Shares of Winnebago (WGO) spiked up over 8% on Thursday after the company surpassed analyst expectations with its fiscal second-quarter earnings report. Furthermore, the company has updated its fiscal 2025 outlook, forecasting sales between $2.8 billion and $3.0 billion, in line with expectations. Winnebago continues to invest in strategic growth areas despite macroeconomic pressures and uncertainties that affect consumer confidence and dealer inventory strategies. Analysts have varied views, with some lowering price targets due to cautious outlooks on the industry recovery amid broader economic concerns.
Top and Bottom-line Beats
Winnebago is a prominent manufacturer of outdoor lifestyle products with a strong focus on recreational vehicles (RVs) that include motorhomes, travel trailers, fifth-wheel products, and boats. The company operates under several recognized brands, including Winnebago, Grand Design, Chris-Craft, and Newmar.
The company reported second-quarter fiscal 2025 results, with revenue of $620.2 million beating analyst expectations by $3.54 million despite an 11.9% year-over-year decline. Gross profit decreased 21.1% to $83.1 million, and gross profit margin decreased 160 basis points. Adjusted earnings per share were $0.19, beating forecasts by $0.03.
Management is optimistic about the long-term prospects in the RV and marine markets, driven by a growing consumer interest in outdoor recreation. Efforts are underway to mitigate tariff impacts while maintaining investment in product innovation and delivering shareholder returns. The company’s fiscal 2025 sales outlook has been updated to a range of $2.8 billion to $3.0 billion, with adjusted earnings per share forecasted to be between $2.75 and $3.75.
Analyst Response Is Mixed
Analysts have had a mixed response to recent earnings, with many lowering their price targets. For instance, Roth MKM and KeyBanc have adjusted their price targets for Winnebago shares, reflecting concerns over macroeconomic uncertainties and their potential impact on consumer behavior. Roth MKM’s Scott Stember lowered the price target to $43 while maintaining a Neutral rating, citing diminishing consumer confidence linked to tariff-related uncertainties, as well as potential margin challenges in the industry. Meanwhile, KeyBanc’s Noah Zatzkin adjusted the target to $47, with an Overweight rating, highlighting macro pressures and policy changes that are affecting the demand for large discretionary purchases.
Winnebago is rated a Moderate Buy overall, based on the recent recommendations of six analysts. The average price target for WGO stock is $50.75, which represents a potential upside of 35.05% from current levels.
