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The Zacks Analyst Blog Highlights: Thor Industries, REV Group, Winnebago and Camping World

By Zacks Investment ResearchStock MarketsJul 09, 2021 07:20AM ET
www.investing.com/analysis/the-zacks-analyst-blog-highlights-thor-industries-rev-group-winnebago-and-camping-world-200590626
The Zacks Analyst Blog Highlights: Thor Industries, REV Group, Winnebago and Camping World
By Zacks Investment Research   |  Jul 09, 2021 07:20AM ET
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For Immediate Release

Chicago, IL – July 9, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Thor Industries (NYSE:THO), Inc. THO, REV Group (NYSE:REVG), Inc. REVG, Winnebago Industries (NYSE:WGO), Inc. WGO and Camping World Holdings (NYSE:CWH), Inc. CWH.

Here are highlights from Thursday’s Analyst Blog:

Enjoy Your RV Vacations This Summer with These 4 Stocks

The coronavirus pandemic brought travel to a screeching halt last year. With quarantine rules and rising fear of infections, vacation plans of even the most dedicated globetrotters came to a standstill. However, with the gradual easing of lockdown restrictions, people started looking for ways to venture out and travel responsibly.

Pent-up wanderlust breathed a new life to the recreational vehicle (RV) industry, with people experiencing the much-needed freedom and fun with RV vacations. In 2020, total RV shipments summed 430,412 units, up 6% year over year and on par with the third best annual shipment on record.

A survey by Abacus Data found out that the pandemic has created roughly 18 million first-time RV travelers in the United States, as mentioned in an RVezy article.

RV Vacays to Still Have Their Days in the Sun

While America has opened up thanks to stepped-up vaccination drive, demand for RVs continues its momentum as we enter the heart of the summer season. Per a Harvest Hosts survey conducted in January 2021, 99% of total respondents said that they felt safe traveling in an RV, while 53% said they planned to exclusively travel using RVs in 2021.

In fact, as COVID-19 cases are rising rapidly with the Delta variant becoming the most dominant strain in the United States, safety remains at the top of mind for most Americans, which will keep driving RV demand.

Additionally, millennials and the zoomers’ zeal for off-the-grid-living is boosting the RV culture. The RV Industry Association (“RVIA”) projects 2021 annual RV shipments to be 576,065 units, signaling an uptick of 33.8% from 2020 and 14.1% increase from the all-time high of 504,600 units sold in 2017.

Quoting RVIA President and CEO Craig Kirby (NYSE:KEX), “Even with other types of travel returning, the demand for RVs continues to climb as people want to get outdoors and experience the joy of an active outdoor lifestyle alongside friends and family.”

With the RV industry being cyclic, economic growth on rapid vaccination progress and massive fiscal stimulus will work in its favor. The Federal Reserve recently raised 2021 real GDP forecast to 7% from 6.5%. Considering the favorable consumer environment and upbeat momentum in the economy, sales and rentals for RVs are set to keep shining.

With a wide variety of offerings, there is an RV for every consumer at every price point. It’s not just RVs that are catching attention now, outdoor supplies in general — including fishing and camping gear — are also in high demand. And it’s not just first-time buyers that are fueling the market; existing users of RVs are also upgrading their vehicles.

Per ResearchAndMarkets.com, the North American RV market is anticipated to be valued at $35.7 billion by 2026, registering a CAGR of about 5% during the 2021-2026 time frame. If the RVIA projections come true, the year 2021 will mark the best year for the RV industry. Amid the rosy scenario, it’s time for you to go RVing with the below-mentioned stocks.

Key Picks

Thor Industries: Indiana-based Thor Industries is the largest manufacturer of RVs in the world. The EHG buyout boosted Thor’s position in the European market and is likely to provide the firm with attractive long-term growth opportunities. Acquisition of Tiffin Motorhomes has further boosted portfolio. Thor’s record backlog of new orders across both the segments offers good visibility into growth through fiscal 2021 and beyond.

Rising cash flow from operations and commitment to enhance shareholder value are fueling investors' confidence. The RV maker registered revenues of $3.5 billion for the April-end quarter, up 105.7% year over year. Consolidated backlog totaled $14.32 billion at the end of the last reported quarter, representing a 550% jump from the year-ago period.

Thor currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

REV Group: REV Group is one of the noted manufacturers of specialty vehicles (including RVs), and related aftermarket parts and services. The firm’s well-established RV brands like Fleetwood, American Coach, Monaco Coach and Holiday Rambler, among others, are boosting the prospects of REV Group’s recreational segment.

Net sales for its recreation segment jumped 109% year over year in the last reported quarter. The firm’s RV backlog at April-end totaled $940.5 million, skyrocketing from $122.9 million at the end of second-quarter 2020.

The company now projects fiscal 2021 net income and free cash flow of $52-$68 million and $65-$88 million versus prior view of $38-$52 million and $45-$70 million, respectively. Encouragingly, management has reinstated dividend payout at the pre-pandemic rate of 5 cents a share per quarter. REV Group presently sports a Zacks Rank #1 and has a VGM Score of A.

Winnebago Industries: Iowa-based Winnebago is one of the leading RV producers in the United States. The company has been riding on the strength of acquisitions, including Newmar, Grand Design and Chris-Craft. The firm came up with revenues of $960.7 million in the last reported quarter, jumping 138.6% year over year.

Winnebago’s increasing free cash flow and strengthening balance sheet enable it to consistently enhance shareholder value. Winnebago’s robust backlog of new orders across both the segments offers good visibility into growth through fiscal 2021.

At May's end, backlog for Towable and Motorhome segments was $1.5 billion and $2.2 billion, up 265% and 323% year over year, respectively. Winnebago currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A.

Camping World: Illinois-based Camping World is one of the noted RV sellers and component suppliers. The company continues buyout binge, which is in sync with its goal of operating a recreational dealer platform in 48 contiguous states. Key buyout deals with Vermont, Boat-N-RV Superstore, Hilmerson RV, Neilson RV, EZ Living RV, among others, to expand footprint and product offerings augur well.

The firm is also mindfully tapping the merchandising potential of its business. Camping World’s revenues grew around 51% to $1.5 billion in the last reported quarter. Driven by persistent strength of business, the firm has raised the 2021 adjusted EBITDA forecast. It now projects adjusted EBITDA of $770-810 million versus the previous forecast of 640-$690 million. Camping World currently carries a Zacks Rank #2 and has a VGM Score of A.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Media Contact

Zacks Investment Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Thor Industries, Inc. (THO): Free Stock Analysis Report

Camping World Holdings Inc. (CWH): Free Stock Analysis Report

Winnebago Industries, Inc. (WGO): Free Stock Analysis Report

REV Group, Inc. (REVG): Free Stock Analysis Report

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The Zacks Analyst Blog Highlights: Thor Industries, REV Group, Winnebago and Camping World
 

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The Zacks Analyst Blog Highlights: Thor Industries, REV Group, Winnebago and Camping World

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