The Globe and Mail reports in its Wednesday, Sept. 13, edition that Citi analyst James Hardiman boosted his recommendation for BRP to "buy" from "neutral," seeing it continue to secure market share gains from rival Polaris. The Globe's David Leeder writes in the Eye On Equities column that while Mr. Hardiman expects both stocks to "trade on near-term retail trends," he opened a pair trade between the two, going "overweight" on BRP and "underweight" on Polaris. Mr. Hardiman says in a note: "The sizable valuation premium accorded to Polaris does not mirror the performance of these two companies, and we would not only expect BRP to outgrow Polaris going forward, but we would also expect this valuation delta to close over time. ... [BRP] should arguably trade at a premium to [Polaris] in our estimation. ... There is a great deal to like about the BRP story, as the company's power sports portfolio features both defensible leadership positions and substantial market share opportunities. In both cases, BRP's long track record of high-quality products and consistent innovation should (in our view) allow it to gain share for the foreseeable future, even if the market itself is difficult to handicap."
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