BRP expecting ‘solid’ results in fiscal Q2
BRP’s fiscal second quarter is expected to be positive with “solid top-line growth”, according to a research note provided to powersports industry magazine Powersports Business by RBC Capital Markets Analyst John Kempf.
“We expect continued growth for the full year, driven by product launches, share gains, and margin improvement. On modestly higher earnings and target multiples, our price target increases to $32 from $29,” Kempf told Powersports Business magazine. The analyst has also placed the BRP, which is traded on the Toronto Stock Exchange, as Outperform.
Kempf stated that the possibility of significant dealership growth for the company, with several hundred new powersports dealers in North America, primarily in the American South and Southwest.
Kempf also noted that BRP “management has made it clear on prior calls that earnings are expected to be down Y/Y in FQ2/14 for a number of reasons: costs associated with the move of Sea-Doo production to Mexico, a normalization of incentive spending (vs. unusually low levels last year), increased R&D expenses, and IPO related costs. As many of these are temporary issues, we expect margins and earnings to return to Y/Y growth in FQ3/14.”