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Brunswick (BC)
NYSE:BC
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Brunswick
(NYSE:BC)
65Neutral
Positive Factors
Financial Strength
BC generated $284M in FCFE and repurchased $200M (~4% of market cap) in FY24, reinforcing its strong cash generating model.
Innovation and Market Share
BC continues to innovate and gain share through the downcycle, outperforming in premium segments and outboard engines.
Negative Factors
Industry Recovery
The potential for a slower industry recovery and later demand pivot from payment buyers is causing a downgrade in the stock rating.
Sales and Earnings Performance
BC navigated an -18% sales decline to $5.2B and a -48% drop in adj. EPS to $4.57 as industry volumes declined sharply.
Brunswick (BC) vs. S&P 500 (SPY)
Market Cap
$3.86B
Dividend Yield2.86%
Average Volume (3M)846.80K
Price to Earnings (P/E)30.6
Beta (1Y)1.25
Revenue Growth-18.19%
EPS Growth-68.10%
CountryUS
Employees16,800
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)1.90
Shares Outstanding65,838,980
10 Day Avg. Volume928,890
30 Day Avg. Volume846,805
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.74
Price to Cash Flow (P/CF)3.20
P/FCF Ratio3.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$77.09Price Target Upside31.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Brunswick Business Overview & Revenue Model
Company DescriptionBrunswick Corporation (BC) is a leading company in the marine and recreation industries, primarily engaged in the design, manufacturing, and distribution of marine engines, boats, and marine parts and accessories. The company operates through three main segments: Propulsion, Parts & Accessories, and Boat. Brunswick's core products include outboard and sterndrive engines, pleasure boats, and a wide range of marine parts and accessories. With a strong focus on innovation and quality, Brunswick is committed to enhancing the boating experience for its customers worldwide.
How the Company Makes MoneyBrunswick Corporation generates revenue through its diversified portfolio across three main segments. The Propulsion segment is the largest revenue generator, primarily selling marine engines under well-known brands such as Mercury and MerCruiser. This segment benefits from both direct sales to boat manufacturers and aftermarket sales to boat owners. The Parts & Accessories segment contributes to revenue through the sale of marine-related products like electronics, engine parts, and maintenance supplies, often through distribution networks and retail channels. The Boat segment adds to the revenue stream by selling boats under various brands, including Bayliner, Boston Whaler, and Sea Ray. Brunswick's earnings are further bolstered by strategic partnerships and a strong dealer network that enhances market reach and customer engagement, as well as a focus on expanding its presence in international markets.
Brunswick Financial Statement Overview
Summary
Brunswick's financial performance shows strong operational efficiency and robust cash flow generation, with a solid cash flow score of 80. However, challenges are present in terms of declining revenue and increased leverage, which are reflected in the income statement and balance sheet scores of 75 and 65, respectively. Addressing these issues is crucial for sustaining growth and financial stability.Income Statement
Brunswick displays a solid profitability profile with a Gross Profit Margin consistently above 20% over the years. The Net Profit Margin has shown signs of volatility, peaking at 10.9% in 2022, but has declined to 2.8% in 2024, indicating some profitability challenges. The Revenue Growth Rate is concerning, with a decline of -18.17% from 2023 to 2024, suggesting potential demand issues or market pressures. Despite this, the company maintains a healthy EBIT and EBITDA Margin, reflecting strong operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a high Debt-to-Equity Ratio of 1.24 in 2023, indicating substantial leverage which could pose risks in economic downturns. However, the Return on Equity improved significantly to 20.1% in 2023, showcasing effective use of equity to generate profits. The Equity Ratio stands at approximately 33.5% in 2023, suggesting a moderate equity buffer against liabilities, but declining equity levels in 2024 could indicate future financial constraints.65
Positive
Cash Flow
Brunswick shows robust cash flow management with a Free Cash Flow to Net Income Ratio consistently above 1, indicating effective cash generation from operations. The Operating Cash Flow to Net Income Ratio has been strong, especially in 2023 with a ratio of 1.74. Despite a decline in Free Cash Flow in 2024, the company has demonstrated an ability to maintain positive cash flows over the years, essential for sustaining operations and growth initiatives.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.24B | 6.40B | 6.81B | 5.85B | 4.35B | Gross Profit |
| 1.35B | 1.83B | 1.95B | 1.67B | 1.21B | EBIT |
| 311.60M | 734.90M | 947.80M | 812.90M | 539.30M | EBITDA |
| 618.70M | 1.01B | 1.18B | 980.50M | 693.50M | Net Income Common Stockholders |
| 149.30M | 420.40M | 677.00M | 593.30M | 372.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 269.80M | 468.60M | 600.10M | 355.30M | 576.30M | Total Assets |
| 5.68B | 6.23B | 6.32B | 5.42B | 3.77B | Total Debt |
| 201.10M | 2.59B | 2.51B | 1.82B | 951.40M | Net Debt |
| -55.40M | 2.12B | 1.91B | 1.46B | 431.80M | Total Liabilities |
| 3.79B | 4.14B | 4.28B | 3.51B | 2.26B | Stockholders Equity |
| 200.00M | 2.09B | 2.04B | 1.91B | 1.51B |
| Cash Flow | Free Cash Flow | |||
| 264.00M | 444.30M | 197.80M | 306.90M | 615.90M | Operating Cash Flow |
| 431.40M | 733.60M | 586.10M | 574.00M | 798.30M | Investing Cash Flow |
| -168.90M | -378.90M | -443.20M | -1.35B | -246.90M | Financing Cash Flow |
| -442.70M | -487.00M | 110.80M | 621.80M | -361.80M |
Brunswick Technical Analysis
Negative
58.70
Price Trends
64.39
Negative
71.39
Negative
73.96
Negative
Market Momentum
-2.16
Positive
38.32
Neutral
36.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BC, the sentiment is Negative. The current price of 58.7 is below the 20-day moving average (MA) of 61.88, below the 50-day MA of 64.39, and below the 200-day MA of 73.96, indicating a bearish trend. The MACD of -2.16 indicates Positive momentum. The RSI at 38.32 is Neutral, neither overbought nor oversold. The STOCH value of 36.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BC.
Brunswick Risk Analysis
Brunswick disclosed 39 risk factors in its most recent earnings report. Brunswick reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brunswick Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $536.35M | 9.91 | 5.75% | ― | -1.73% | -40.39% | |
68 Neutral | $298.57M | 17.81 | 11.94% | 6.35% | -38.35% | -59.21% | |
65 Neutral | $3.86B | 30.63 | 7.50% | 2.86% | -18.19% | -68.10% | |
64 Neutral | $304.39M | ― | -1.53% | ― | -45.70% | -115.77% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
BC
Brunswick
57.44
-29.99
-34.30%
MPX
Marine Products
8.54
-0.07
-0.81%
HZO
Marinemax
23.62
-7.41
-23.88%
MCFT
MasterCraft Boat Holdings
17.27
-3.75
-17.84%
Brunswick Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -13.29% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The call highlighted Brunswick's strong cash flow generation, market share gains, and successful product launches, but also noted challenges with declining sales, tariff impacts, and increased discounting. The overall sentiment is cautiously optimistic, with strategic initiatives in place to address challenges.Highlights
Strong Cash Flow Generation
Brunswick generated $278 million of free cash flow in Q4, a record for any fourth quarter in its history, resulting in a full year free cash flow conversion of 92%.
Market Share Gains in Outboard Engines
Mercury Marine gained 110 basis points of U.S. retail outboard engine market share during the year, with significant share increases at 2025 early season boat shows.
Successful New Product Launches
Brunswick launched numerous new products across its brands, including Lowrance Elite FS fishfinders and Recon trolling motors, contributing to strong performance at trade shows.
Record Boat Show Sales
Unit boat sales across major boat shows were up 13% year-to-date, with brands like Sea Ray and Quicksilver achieving record sales.
Freedom Boat Club Expansion
Freedom Boat Club achieved over 600,000 annual member trips for the second consecutive year and expanded into new regions including New Zealand and Europe.
Lowlights
Decline in Net Sales and Earnings
Net sales in Q4 were down 15% compared to Q4 2023, with adjusted operating margins of 4%, resulting in an adjusted EPS of $0.24.
Challenges from Tariffs and Foreign Exchange
The uncertain tariff environment and strong U.S. dollar pose significant headwinds, with an anticipated annualized impact of approximately $35 million in 2025.
Continued Lower Production Levels
Efforts to moderate field inventory in the Propulsion business resulted in a 24% decrease in sales, impacting operating earnings due to lower absorption.
Increased Discounting and Promotions
Elevated discounting and promotion levels remain, particularly on prior model year products, as OEMs and channel partners are cautious in their production and ordering patterns.
Impairment Charges in Navico Group
Navico Group's operating earnings decreased in Q4 primarily due to intangible asset impairment charges and slight net sales declines.
Company Guidance
During Brunswick Corporation's earnings call, the company provided guidance for fiscal year 2025, projecting adjusted earnings per share (EPS) between $3.50 and $5.00. They anticipate net sales ranging from $5.2 billion to $5.6 billion, with expectations of free cash flow exceeding $350 million and a free cash flow conversion rate of 92%. Brunswick plans for capital expenditures similar to 2024 levels and forecasts generating approximately $100 million from net working capital. The guidance assumes a flat U.S. boat retail market in terms of units sold, with potential for market outperformance. The EPS bridge accounts for a $1.25 benefit from cost reduction efforts, offset by a $1 impact from variable compensation resets, and headwinds of approximately $0.80 per share due to tariffs and foreign exchange rates. Additionally, the company plans a minimum of $80 million in share repurchases and anticipates continued improvements in wholesale ordering patterns as the year progresses.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.