BRP Inc Shs Subord.Voting
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$52.00 | Dwq | Bwbkgtmsw |
Near Term Crimped By Supply Chain Constraints at BRP, but Long-Term Remains Promising
Business Strategy and Outlook
Fiscal 2023 should be another banner year for BRP's sales given the still robust consumer demand and high level of backfill units needed at its dealers. However, we don't think this will distract the team from its long-term product and operational priorities, which should improve the firm's competitive positioning. BRP's strategic priorities focus on market share growth, lean operations, and cultivating an engaged workforce, all while honing in on evolving customer demands. With manufacturing facilities located near demand (for example, personal watercraft in Mexico) and timely spend to increase facility capacity as needed, BRP should capture efficiencies in its plants. Firmwide centers of expertise and excellence should allow BRP to manufacture more optimally, improving its utilization and allowing it to bring products to market quickly, ensuring a continually relevant and in-demand product lineup (with electric vehicle offerings in all segments by 2026). Because BRP is exposed to many customer segments, we don’t believe acquisitions are required for expansion. However, we think entry into white-space categories and small acquisitions, particularly in parts and accessories as well as marine, are possible and could support margin improvement.