Analyst Note| David Whiston, CFA, CPA, CFE |
Winnebago reported fiscal third-quarter 2020 results severely hurt by a full manufacturing shutdown for all of April due to coronavirus. That said, the firm’s roughly 85% variable cost structure and good financial health give us confidence it will be stronger after this recession than before the downturn. RV demand is also booming in the U.S. due to COVID-19’s impact on air travel leading many Americans to use an RV vacation as a substitute. We are raising our fair value estimate to $40 from $37 as our March model revision was too punitive on COVID-19's revenue impact for fiscal years 2020-21.