Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

BMO Says RV Stocks Aren’t The Way To Play Hurricane Harvey

Courtesy of Benzinga.

There have been plenty of stocks on the move this week in the aftermath of Hurricane Harvey. However, BMO Capital Markets says investors should think twice about buying RV stocks as a Harvey trade.

Analysts such as Baird Equity Research’s Craig Kennison, expect major demand for RVs from the Federal Emergency Management Agency due to the need for emergency shelter.

“The RV industry likely will be called upon to provide temporary housing in the aftermath of Harvey,” Kennison wrote earlier this week.

Related Link: Generators To Insurers: Trading Tropical Storms

But while demand for RVs may surge due to the storm, BMO analyst Gerrick Johnson says demand isn’t necessarily the issue for RV stocks.

“Given capacity constraints, we would not view demand from FEMA as incremental, but rather a reallocation of manufacturing assets away from the robust retail market,” Kennison wrote on Friday.

Kennison said Winnebago Industries, Inc. (NYSE: WGO), which is up 4.3 percent in the past five days, will be particularly insulated from any FEMA demand because of its high-end product mix. Instead, FEMA will likely be most interest in the lower-priced models from Thor Industries, Inc. (NYSE: THO).

Unfortunately, Kennison said Winnebago, Thor and other RV makers have been struggling to keep up with retail demand as-is. In the most recent quarter, Thor reported that towable order backlog has more than doubled from a year ago.

With any FEMA orders likely bumping retail orders, the impact of Harvey likely comes down to pricing of the government models, and Thor has not commented on the issue.

BMO maintains a Market Perform rating and $110 price target for Thor Industries. The firm has a Market Perform rating and $34 price target for Winnebago.

Latest Ratings for THO

Date Firm Action From To
Jul 2017 Stifel Nicolaus Initiates Coverage On Hold
Feb 2017 Baird Upgrades Neutral Outperform
Nov 2016 BMO Capital Maintains Market Perform

View More Analyst Ratings for THO


View the Latest Analyst Ratings

Posted-In: BMO Capital Markets Craig Kennison Harvey Hurricane HarveyAnalyst Color Analyst Ratings


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!