THOR Industries, Inc. (THO), a major player in the manufacturing and selling of recreational vehicles (RVs) and associated parts across North America and Europe, is on the brink of revealing its Q2 (Jan) financial results. The company is anticipated to report an EPS of $0.67, marking a 34% year-over-year increase, with revenues expected to see a slight 3% dip to $2.27 billion.
For FY24, THOR projects earnings between $6.25 and $7.25, showcasing potential year-over-year growth for the first time since FY22. Despite a projected mild 3% revenue decline to between $10.5 and $11.0 billion, this represents a notable improvement from the 32% downturn witnessed in FY23.
This anticipated uplift in THOR's performance is largely credited to easing macroeconomic pressures, such as reduced inflation and interest rates, potentially boosting consumer confidence. The RV Industry Association (RVIA) predicts a resurgence in North American wholesale unit shipments in CY24, aligning with THOR's expectations. Nevertheless, persistent supply chain issues continue to stifle European market growth, particularly for motorized units.
Camping World (CWH), an RV dealership, has hinted at a revival in new RV sales, forecasting revenue, unit sales, and profit upticks in the foreseeable future. Conversely, RV component supplier LCI Industries (LCII) reports a dip in demand from RV OEMs as dealers adjust inventories, though it anticipates a normalization in RV production shortly.
Despite past hurdles, THOR Industries has seen its stock soar by over 35% in the past year, with a notable 40% rise since November. This rally sets a high bar for the upcoming Q1 earnings, pressing THOR to not only meet but possibly exceed expectations and potentially update its FY24 outlook.
With rival Winnebago (WGO) set to announce its FebQ results on March 21, THOR Industries is observed with a market cap of $6.78 billion and an enterprise value of $7.64 billion. Sporting a forward P/E ratio of 19.34, it stands above the S&P 500's current forward P/E, with Wall Street consensus pegging it as a Hold across 10 analysts.
As the RV sector begins to emerge from its recent downturn, THOR Industries is positioned to leverage the improving economic landscape and positive market trends. Investors eyeing the RV industry's revival may find THOR Industries an enticing prospect, given its promising outlook for revenue growth, margin enhancement, and profitability resurgence.