On Wednesday, DA Davidson maintained a Neutral rating with a $95.00 price target on shares of Thor Industries Inc. (NYSE:THO), a leading manufacturer of recreational vehicles. The company's stock has seen an uptick after surpassing earnings expectations for the fourth quarter of 2024 and providing earnings per share (EPS) guidance for fiscal year 2025 that fell short of analyst predictions.
Thor Industries' conservative forecast for the next fiscal year suggests earnings between $5.00 and $6.00 per share. Despite the company's outlook not factoring in significant improvement in fundamental business conditions, the firm's analysts have chosen to uphold their current stance on the stock due to concerns over the earnings potential for fiscal year 2026. This caution is attributed to the company's pricing, which remains significantly higher than levels seen before the COVID-19 pandemic.
The price target of $95 is derived from applying a price-to-earnings (P/E) multiple of 13.5 times DA Davidson's estimated fiscal year 2026 earnings of $7.00 per share. This estimate is slightly conservative compared to the consensus estimate of $7.28. The firm's neutral position reflects a balance between the recent positive performance and the long-term uncertainties surrounding the company's earnings growth.
Thor Industries' performance in the fourth quarter of 2024 has been a positive development, yet the firm's analysts are exercising caution as they look ahead to the company's future earnings, particularly in fiscal year 2026. The maintained Neutral rating and price target suggest a wait-and-see approach for investors as the market assesses the potential for Thor Industries to enhance its financial fundamentals in the coming years.
In other recent news, Thor Industries has seen a series of developments. The company's fourth-quarter fiscal year 2024 results and fiscal year 2025 outlook were met with a maintained Sector Weight rating from KeyBanc.
Thor's guidance for fiscal year 2025 earnings per share (EPS) is set between $4.00 and $5.00, falling below the anticipated range of $5.00 to $6.00 expected by investors. Despite this, BMO Capital has maintained its Outperform rating on Thor Industries, with a steady price target of $120.00, even after the company's earnings exceeded forecasts.
Benchmark initiated coverage on Thor Industries with a Hold rating, estimating the company's enterprise value at approximately $5.2 billion. Thor Industries maintains a revised full-year 2024 guidance, expecting consolidated net sales to range between $10.0 billion and $10.5 billion. The recreational vehicle industry, including Thor Industries, is grappling with a sales decline, attributed to high interest rates and a shift in consumer behavior.
InvestingPro Insights
Thor Industries, Inc. (NYSE:THO) has demonstrated a commitment to shareholder returns, having raised its dividend for 9 consecutive years and maintained dividend payments for 38 consecutive years. This consistency is reflected in a current dividend yield of 1.75%. In addition, Thor Industries has managed to keep a moderate level of debt, which may provide some financial flexibility in uncertain market conditions. The company's stock has also shown a strong return over the last three months, with a 23.73% price total return, signaling robust investor confidence in the near term.
On the financial metrics front, Thor Industries holds a market capitalization of $5.68 billion, with a P/E ratio of 21.49, which is slightly adjusted to 21.24 when considering the last twelve months as of Q4 2024. Despite facing a decrease in revenue growth, down by 9.69% over the last twelve months, the company's gross profit margin stands at 14.46%, although DA Davidson has flagged concerns over weak gross profit margins. With these figures in mind, investors may want to consider the company's recent performance and its ability to maintain profitability, as analysts predict Thor will be profitable this year.
For those seeking more detailed analysis and additional insights, InvestingPro offers a range of tips for Thor Industries, including a fair value estimate of $131.92, which is notably higher than the current analyst target. The platform lists several more InvestingPro Tips for Thor Industries, which can be explored at https://www.investing.com/pro/THO to help investors make more informed decisions.
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