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Winnebago Industries Inc WGO Stock Quote

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Winnebago's Investor Day Brings Fiscal 2025 Targets We See as Hard to Reach

Analyst Note

| David Whiston, CFA, CPA, CFE |

Winnebago unveiled ambitious fiscal-year 2025 targets at its Nov. 15 investor day. We are raising our fair value estimate to $86 from $77 to give some benefit of the doubt to what we consider a high performing management team, however, we are skeptical on full realization of the targets. Fiscal 2025 revenue is targeted at $5.5 billion, while CEO Michael Happe called for fiscal 2023 to be a softening year for the recreational vehicle market and fiscal 2024 a year of stabilization. Based on current Refinitiv fiscal 2024 revenue consensus, Winnebago’s revenue would have to grow nearly 50% in fiscal 2025 to reach $5.5 billion, and we find growth that fast unlikely given Happe said most growth will be organic. Fiscal 2025 gross margin is targeted at 19% (18.7% in fiscal 2022) and adjusted EBITDA margin at 13% (13.1% in fiscal 2022). The stock fell nearly 8% on Nov. 15, possibly from market skepticism on growth or no EBITDA margin expansion from fiscal 2022.

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Business Description

Winnebago Industries manufactures Class A, B, and C motor homes along with towables, customized specialty vehicles, boats, and parts. Headquartered in Eden Prairie, Minnesota, Winnebago has been producing recreational vehicles since 1958. Revenue was about $5 billion in fiscal 2022. Winnebago expanded into towables in 2011 with the acquisition of SunnyBrook and acquired Grand Design in November 2016. Towables made up 83% of the firm's RV unit volume, up from 31% in fiscal 2016. The company's total RV unit volume was 71,922 in fiscal 2022. Winnebago expanded into boating in 2018 with the purchase of Chris-Craft, bought premium motor home maker Newmar in November 2019, and bought Barletta pontoon boats in August 2021. It also is developing electric and autonomous technology.

13200 Pioneer Trail
Eden Prairie, MN, 55347
T +1 952 829-8600
Industry Recreational Vehicles
Most Recent Earnings Aug 31, 2022
Fiscal Year End Aug 26, 2023
Employees 7,445

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