1. Thor Industries Isn't The Only RV Stock On The Market
Thor Industries (NYSE:THO) bucked the general third-quarter earnings cycle trend by delivering a very strong earnings report. The company not only reported revenue growth but revenue growth above expectations, strong margins despite secular headwinds, better-than-expected earnings, gave positive guidance, and then followed that all up by raising the dividend.
Analysts at BMO quickly gave the stock the thumbs-up citing strong demand trends that we see driving results well into 2022. As it stands, backlogs within the RV industry have the outlook for recovery at the end of 2022 if not in 2023. What this means is that RV manufacturers are working as hard as they can to fulfill their backlogs so they can begin to restock dealer inventory and that means many many quarters of business at full capacity.
2. Winnebago Is Dreadfully Underestimated
Winnebago Industries (NYSE:WGO) is slated to report earnings on Oct. 21 and the outlook is positive but there is something you should know. The analysts are expecting a slight uptick in sequential growth that we think underestimates the market. While Winnebago is surely experiencing the same systematic headwinds as everyone else in the country, the company has also been gaining market share and ramping production. While we expect to see some impact on the business, we also expect to see the company able to soundly crush the consensus estimate of $965 million or up a mere 0.5% sequentially.
The analysts have been quiet on the stock since the last reporting period but the Marketbeat.com consensus remains bullish. The consensus rating is a Buy with a price target that assumes 10% upside for the stock. Shares of Winnebago have been rallying strongly since the Thor Industries report and are up more than 18% in that time. In our view, this rally should continue into the release of Winnebago’s Q3 earnings report and could take it up to the $89 level and a new all-time high. Winnebago pay’s a safe and growing 1% dividend yield and comes with a near fortress balance sheet.
3. LCI Industries Is Fundamental To The RV Industry
LCI Industries (NYSE:LCII) manufactures components for the RV industry, both OEM manufacturers and aftermarket alike, making it a fundamental play on the market. With RV deliveries expected to top 30% this year and the RV manufacturers working at maximum capacity to fill those orders, we see no end in sight to the business for LCI Industries. Add to that demand from the recreational market and the future of the business is all but secured. LCI Industries is slated to report earnings on November 1st and expected to post a sequential downtick in revenue that, when we read it, made us chuckle a little. LCI Industries is going to blow away the consensus estimate there is no doubt about it in our minds.
The analysts have been quiet on LCI Industries since the last reporting period but are even more bullish on this stock than they are on Winnebago. The Marketbeat.com consensus estimate of $168.65 is more than 22% above the current price action and would be a new all-time high if reached. Shares of LCII yield a more robust 2.65% that we also view as safe and growing.
4. Camping World Is Your High-Yield Choice
Camping World Holdings (NYSE:CWH) is a retailer of both OEM RVs and aftermarket parts making it a dual play on the industry. It's also got some forays into the EV market and EV RVs so we like it for that reason as well. Most importantly, within this story of the RV industry, Camping World pays a near 5% yield and we see the distribution getting larger over time. Looking at the chart, shares of CWH look ready to move higher and could gain as much as 20% before encountering serious resistance. That target compares to the Marketbeat.com consensus of $50 which would be a new all-time high.
