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Polaris Industries

by Rob Plaza

April 27, 2010 | Comments : 0 Recommended this article: (0)
PII

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Polaris Industries ( PII - Snapshot Report ) designs, engineers, and manufactures off-road vehicles including all terrain vehicles, snowmobiles, and motorcycles. The company also provides replacement parts and accessories.

The stock has a Zacks #2 Rank. It trades at 17.7x 2010 consensus EPS estimates and 16.5x 2011 consensus EPS estimates.

Growth and Income

Analysts estimate that Polaris will grow its earnings per share 16.6% in 2010, 7.0% in 2011, and 12.5% per year for the next three to five years. In addition, the company offers investors decent income with its dividend yield of 2.6%.

Strong First-Quarter Results

On April 21, Polaris reported revenue of $361.7 million, up 15.9% year-over-year. The company earned $0.59 per share, an increase of 126.9% of the year-ago quarter. More importantly, Polaris beat the Zacks Consensus Estimate by 13 cents, or 28.3%.

PII has now beaten the Zacks Consensus for the last five quarters by an average 17.4%.

Polaris increased its sales and earnings guidance for 2010. Management now expects sales growth of 8%-11%, and EPS of $3.48-$3.60, up from its prior guidance of $3.15-$3.30.

The company's strong quarterly results were driven by increasing demand for its off-road vehicles and Victory motorcycles.

Estimates Moving Higher

The company's strong first-quarter results and higher 2010 guidance prompted analysts to boost their estimates for 2010 and 2011

In the last seven days, there have been 14 upward estimate revisions. The Zacks Consensus Estimate for 2010 climbed 28 cents, or 8.5%, to $3.56, and the Zacks Consensus Estimates for 2011 increased 16 cents, or 4.4%, to $3.80.

The Chart

PII shares traded in a range between $37 and $50 from September 2009 through March 2010. The stock broke out of that range on March 9 and have continued to move higher. After gapping higher on its strong first-quarter earnings report, PII shares are now up over 45% in 2010.

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