Skip to Content
Morningstar
Get 14 Days Free

Polaris Inc PII

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lifting Polaris’ Outlook on Robust Demand and Share Gain Expectations; Shares Modestly Overvalued

Jaime M. Katz, CFA Senior Equity Analyst

Analyst Note

| Jaime M. Katz, CFA |

We plan to raise our $100 per share fair value estimate on wide-moat Polaris by a low-double-digit rate after incorporating its robust fourth-quarter 2020 performance and adjusting for a 2021 outlook that handily outpaces our prognosis. Polaris delivered fourth-quarter 2020 sales growth of 24% (to $2.2 billion) and adjusted EPS growth of 83% (to $3.34) thanks to solid consumer takeaway and well-controlled costs. In 2021, the firm expects sales of around $8 billion and adjusted EPS of $8.45-$8.75, well above our $7.1 billion sales and $7.58 EPS forecast, as the product lineup continues to cater to socially distant activity demand. However, we foresee 2021 as a tale of two halves, with robust demand and cost leverage persisting in the first part of the year, lapping weak first-half 2020 performance, with the second-half sales and profits beginning to normalize, cycling strong social distancing demand in the back part of 2020.

Read Full Analysis

Company Profile

Business Description

Polaris designs and manufactures off-road vehicles, including all-terrain vehicles and side-by-side vehicles for recreational and utility purposes, snowmobiles, small vehicles, and on-road vehicles, including motorcycles and low-emission vehicles, along with the related replacement parts, garments, and accessories. The firm entered the aftermarket parts segment in 2016, tying up with Transamerican Auto Parts and then tapped into boats through the acquisition on Boat Holdings in 2018, offering exposure to new segments of the outdoor lifestyle market. Polaris products retailed through 2,250 dealers in North America and through 1,400 international dealers as well as 32 subsidiaries and 85 distributors in more than 120 countries outside North America at the end of 2019.

Contact
2100 Highway 55
Medina, MN, 55340
T +1 763 542-0500
Sector Consumer Cyclical
Industry Recreational Vehicles
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 15,000

Related

Market Update
New 5-Star Stocks
These names are all significantly undervalued by our standards after the market rout.
Susan Dziubinski
Our Picks
15 Top-Quality Stocks
These names were recently added to the Morningstar Wide Moat Focus Index.
Susan Dziubinski
Investing Specialists
Great Diversifiers, 401(k) Oddities, and Vanguard's New Fund
We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended May 31.
Morningstar.com
Stock Strategist
Polaris Revs Up Profit Growth With Acquisitions
Healthy margins trump the added cyclicality resulting from recent deals.
Jaime M. Katz
Stock Strategist
Wide-Moat Polaris Is Undervalued
It isn't all good news, but we think the benefits outweigh the risks.
Jaime M. Katz
Our Picks
The Wide Moat Focus Index Adds 11 New Holdings
The Morningstar Wide Moat Focus Index made room for some undervalued consumer defensive stocks in March.
Karen Wallace
Our Picks
6 New Stocks in the Wide Moat Focus Index
The Morningstar Wide Moat Focus Index adds some healthcare and tech, eschews some financial services stocks.
Karen Wallace
Our Picks
11 Stocks of Summer With Some Sizzle Left
These names all gained more than 10% during the past three months yet remain undervalued by our metrics.
Susan Dziubinski
Our Picks
19 Stocks on a Roll, With More Room to Run
While there's no telling if their short-term momentum will continue, these stocks' long-term prospects look bright.
Karen Wallace
Stock Strategist
Polaris' Profits Headed North
The business is stabilizing, although it’s not quite out of the woods yet.
Jaime M. Katz
Our Picks
10 Cheap Stocks Set to Grow Their Dividends
We look at the least expensive companies in the Morningstar US Dividend Growth Index, which looks for cash-rich businesses with sustainable and growing yields.
Karen Wallace
Investing Specialists
New Stocks in the Morningstar Wide Moat Focus Index
We've added to the roster of attractively priced, competitively advantaged companies.
Karen Wallace
Stock Strategist
Harley's Commitment to Wide Moat a Plus for Investors
Outreach and international expansion stand to bolster the company's brand intangible asset.
Jaime M. Katz
Our Picks
4 Stocks for Buffett Enthusiasts to Consider
These four firms have wide moats, strong profitability, and reasonable valuations today.
Christine Benz
Stock Strategist Industry Reports
Off-Road Downshift Unlikely to Stall Leisure Firms
Acquisitions and new product categories should bolster long-term sales growth.
Jaime M. Katz
US Videos
An Off-the-Beaten-Path Wide-Moat Idea
Temporary headwinds aside, Polaris is a standout among powersports companies, says Morningstar's Jaime Katz.
Jaime M. Katz
Quarter-End Insights
Consumer Cyclical: Consumer Volatility Creates Investment Opportunities
The market now appears to be pricing in more conservative long-term cash flow assumptions than baked into our longer-term consumer cyclical valuations.
Bridget Weishaar
Stock Strategist
Arctic Cat Repositions for Growth
Investors could be rewarded if management executes its operational turnaround, but patience is key.
Jaime M. Katz
Stock Strategist
Strong Pipeline Blazes Trail for ATV Maker Polaris
Product innovation and overseas expansion led us to raise the firm's economic moat rating to wide, says Morningstar's Jaime Katz.
Jaime M. Katz
US Videos
9 New Names Join the Wide Moat Focus Index
Some energy names and out-of-favor companies joined the index, but, in a sign of the times, few deeply discounted stocks.
Matthew Coffina