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Is This 'Strong Buy' Stock a Must-Own for 2022 and Beyond?
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Winnebago Industries, Inc. (WGO - Free Report) is an iconic American company and a leading outdoor lifestyle product manufacturer. WGO is coming off back-to-back strong years and its outlook shows consumers are still ready to shell out money on big-ticket items amid the economic comeback and the ongoing craving for the outdoors.
Winnebago is set to release its first quarter fiscal 2022 financial results before the market opens on Friday, December 17. WGO stock is currently trading at a solid discount to its highs and it offers tons of other solid fundamentals.
Cruising USA
Winnebago builds motorhomes, travel trailers, fifth wheel products, and boats under multiple brands, including its namesake, Chris-Craft, Newmar, and others. WGO was cruising long before the pandemic, having posted mostly huge revenue growth over the past decade, aside from a few tiny hiccups. For example, its FY17 revenue soared 59%, its FY18 sales climbed 30%, and its FY20 revenue jumped 19%—with FY19 having dipped only -1.5%.
Image Source: Zacks Investment Research
WGO then posted 54% growth during its fiscal 2021 (period ended August 28) to help its adjusted earnings skyrocketed 230%. Winnebago benefitted from both the soaring stock market that saw people flush with cash and a desire to spend more time outdoors and away from crowded places.
Winnebago is projected to post 36% higher adjusted earnings in its first quarter of 2022, on 27% stronger revenue. Longer-term, WGO’s total fiscal FY22 earnings and revenue are projected to climb 10% and 16%, respectively, above its covid-boosted 2021.
Plus, Winnebago has crushed our EPS estimates by an average of 42% in the last four quarters. And its EPS outlook is greatly improved since its Q4 report, with its Q1 figure up 23%, FY22 16% higher, and FY23 8% stronger.
What Else
Winnebago’s strong EPS revisions activity helps it land a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grades for Value and Growth in our Style Scores system. Winnebago has upped its stock buybacks in 2021 and raised its dividend, with a 1% yield at the moment.
Investors should also know that its Building Products - Mobile Homes and RV Builders space is in the top 2% of over 250 Zacks industries at the moment. WGO has easily outperformed its peers and the S&P 500 over the last 10 years, up 920%. This trend continues more recently, with Winnebago having surged 240% in the past three years vs. the benchmark index’s 90% run and its industry’s 170%.
Image Source: Zacks Investment Research
Bottom Line
The stock has cooled off in 2021 and it currently trades around 17% under its March records at around $71 a share. Winnebago's current Zacks consensus price target also represents 22% upside to Tuesday's level. And it hovers under neutral RSI levels at the moment.
The downturn has also significantly recalibrated WGO’s valuation. Winnebago trades at a 50% discount to its own year-long highs and 30% under its industry at 7.4X forward 12-month earnings. And unlike much of the market, WGO is trading well below where it was five and ten years ago, which makes WGO even more enticing.
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Is This 'Strong Buy' Stock a Must-Own for 2022 and Beyond?
Winnebago Industries, Inc. (WGO - Free Report) is an iconic American company and a leading outdoor lifestyle product manufacturer. WGO is coming off back-to-back strong years and its outlook shows consumers are still ready to shell out money on big-ticket items amid the economic comeback and the ongoing craving for the outdoors.
Winnebago is set to release its first quarter fiscal 2022 financial results before the market opens on Friday, December 17. WGO stock is currently trading at a solid discount to its highs and it offers tons of other solid fundamentals.
Cruising USA
Winnebago builds motorhomes, travel trailers, fifth wheel products, and boats under multiple brands, including its namesake, Chris-Craft, Newmar, and others. WGO was cruising long before the pandemic, having posted mostly huge revenue growth over the past decade, aside from a few tiny hiccups. For example, its FY17 revenue soared 59%, its FY18 sales climbed 30%, and its FY20 revenue jumped 19%—with FY19 having dipped only -1.5%.
WGO then posted 54% growth during its fiscal 2021 (period ended August 28) to help its adjusted earnings skyrocketed 230%. Winnebago benefitted from both the soaring stock market that saw people flush with cash and a desire to spend more time outdoors and away from crowded places.
Winnebago is projected to post 36% higher adjusted earnings in its first quarter of 2022, on 27% stronger revenue. Longer-term, WGO’s total fiscal FY22 earnings and revenue are projected to climb 10% and 16%, respectively, above its covid-boosted 2021.
Plus, Winnebago has crushed our EPS estimates by an average of 42% in the last four quarters. And its EPS outlook is greatly improved since its Q4 report, with its Q1 figure up 23%, FY22 16% higher, and FY23 8% stronger.
What Else
Winnebago’s strong EPS revisions activity helps it land a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grades for Value and Growth in our Style Scores system. Winnebago has upped its stock buybacks in 2021 and raised its dividend, with a 1% yield at the moment.
Investors should also know that its Building Products - Mobile Homes and RV Builders space is in the top 2% of over 250 Zacks industries at the moment. WGO has easily outperformed its peers and the S&P 500 over the last 10 years, up 920%. This trend continues more recently, with Winnebago having surged 240% in the past three years vs. the benchmark index’s 90% run and its industry’s 170%.
Bottom Line
The stock has cooled off in 2021 and it currently trades around 17% under its March records at around $71 a share. Winnebago's current Zacks consensus price target also represents 22% upside to Tuesday's level. And it hovers under neutral RSI levels at the moment.
The downturn has also significantly recalibrated WGO’s valuation. Winnebago trades at a 50% discount to its own year-long highs and 30% under its industry at 7.4X forward 12-month earnings. And unlike much of the market, WGO is trading well below where it was five and ten years ago, which makes WGO even more enticing.