Polaris Industries (PII) PT Raised to $170 at Longbow Research After Impressive Channel Checks
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Longbow Research analyst David MacGregor raised the price target on Polaris Industries (NYSE: PII) to $170.00 (from $135.00) after checks point to DD% growth in all powersports segments despite lean inventory. Key points include:
1. 1Q NA ORV retail up 35-40% yr/yr despite very limited inventory
2. Stimulus, weather, and comps all supported March/April acceleration
3. Inventory replenishment remains low with most units selling quickly
4. We see the strong ag recovery as being a multi-year EPS driver for PII
5. Cruisers outperform larger touring as Indian continues to take share
6. PII's pontoon retail sales were up 55-60% in 1Q; most sold out for 2021
The analyst stated "We maintain a favorable view on PII based on continued strong demand for powersports, especially ORVs. The under-inventoried channel condition present in most segments should provide a revenue lift in excess of POS extending well into 2022, despite lapping tough comps. Additionally, we believe the multi-year EPS lift from the recovering ag markets represents a lesser-known catalyst that is not fully priced into the shares."
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