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Thor Industries: RV Leader Seeks to Bounce Back From Postpandemic Slump

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We are initiating coverage on recreational vehicle manufacturer Thor Industries with a no-moat rating and a fair value estimate of $139 per share. Thor is the world’s largest RV manufacturer with greater than 40% market share in North America for both motorhomes and towables, and greater than 20% market share in Europe, generating over $11 billion in sales in fiscal 2023. The company boasts a portfolio of over 30 brands, most notably Airstream and Tiffin, targeting customers in both the North American and European market. For fiscal 2023, North America accounted for over 72% of sales and Europe accounted for over 27% of sales.

Despite Thor’s leading market share in North America, we do not believe the company has built maintainable barriers to entry that would warrant a moat and conclude that Thor’s market share is largely a product of significant acquisitions in a relatively small industry. For reference, North American wholesale RV shipments are expected to be less than 300,000 in calendar 2023. We have also lowered Winnebago Industries’ WGO moat rating to none from narrow. Despite Winnebago’s size at number three in North American market share, we do not believe it has established adequate scale to warrant a cost advantage relative to competition such as Thor and Forest River.

We now believe that the recreational vehicle industry has been unable to develop sufficient barriers to entry to prevent new players from entering the market. RV producers face cyclical demand plus tough competition, and we feel these firms operate in an even more cyclical sector than traditional automakers. Although RV producers appear to face less competition than automakers do, as evidenced by the oligopolistic nature of the RV industry with three manufacturers consistently accounting for roughly 90% North American market share, we attribute this dynamic to the much smaller market size of the RV industry as opposed to any maintainable competitive advantages for Thor and Winnebago.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

David Whiston

Strategist
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David Whiston, CFA, CPA, CFE, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007.

Before Morningstar, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner. In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011.

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