While the entire recreation sector is feeling the positive impact of the recent boom, a recently released report shows dealerships have experienced larger gains in stock price than OEMs and suppliers.
Baird Global Investment Banking’s August 2020 Recreation Sector Update, which analyzes numbers from representative companies in the U.S. and abroad, shows recreation dealership stock prices rose 116 percent between Feb. 28 and Aug. 21.
During that same period, RV OEMs’ stock prices rose 37 percent, compared to 8 percent for marine OEMs and 2 percent for powersports OEMs. OEM/aftermarket suppliers’ stock rose 33 percent. The S&P 500 rose 15 percent.
“Strong industry momentum continues as consumers opt for outdoor activities, including boating, RVing, camping and powersports,” Baird’s summary analysis stated. “Sector participants reported an unprecedented summer selling season.”
Among key points Baird analysts highlighted:
- Pandemic-driven demand for outdoor recreation is expanding the total addressable market given the dramatic influx of first-time buyers that are expected to convert into lifelong customers.
- Continued strength of new retail sales has further reduced dealer inventories with healthy backlogs; new inventory is reaching historical lows, with used inventory remaining lean.
- While stock prices moderated in the back part of August, broader sector multiples continue to remain well above long term averages.
Baird’s survey of North American dealer sentiment showed RV dealers reporting unprecedentedly positive outlook on the current situation, with rising optimism for the next three to five years. Click here to read Baird’s full August 2020 Recreation Sector Update.
