Raymond James Downgrades Camping World Holdings (CWH) to Market Perform, 'stock now reflects solid execution'

Raymond James analyst Joseph Altobello downgraded Camping World Holdings (NYSE: CWH) from Outperform to Market Perform.

The analyst comments "CWH: stock now reflects solid execution and improved trends in ‘24. We’re downgrading the shares of Camping World to Market Perform from Outperform and removing our prior $27 target price. To be clear, we continue to believe CWH offers the best value in the RV space, given its exposure to less cyclical businesses beyond new RV sales, including used RVs, parts and service, as well as its Good Sam segment (finance and insurance, roadside assistance, extended warranties, etc.). Further, the company appears to be looking past the current cycle and is prudently using the challenged RV operating environment to its advantage by aggressively acquiring independent dealers, as it’s targeting a 50% increase in its store count over the next five years. That said, the stock has appreciated 46% YTD and has surged past our target price. Further, the company now trades at 7.9x our Street-high 2024 ad. EBITDA estimate of $550M, which is in-line with its historical average multiple of ~8.0x. Finally, while we do expect some improvement in both wholesale and retail trends next year (more so the former than the latter due to dealer inventory reductions this year), we believe the industry will nonetheless remain challenged by a number of headwinds, including affordability (after several years of aggressive price increases and higher borrowing rates) and an uncertain macroeconomic environment. Thus, we believe much of this expected improvement next year is largely priced into the stock, and so we would wait for either a better entry point or greater clarity on a more pronounced retail recovery in 2024."

For an analyst ratings summary and ratings history on Camping World Holdings click here. For more ratings news on Camping World Holdings click here.

Shares of Camping World Holdings closed at $32.48 yesterday.

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