In times of social distancing, recreational vehicles hold key to vacations1 min read . Updated: 09 May 2020, 06:02 PM IST
The sale of RVs has gained strength over the past few weeks, giving hope to auto manufacturers at a time of global slowdown due to coronavirus crisis.
Camping World Holdings Inc. jumped as much as 35% on Friday after reporting first-quarter results that beat analysts’ projections, driven by stronger-than-expected sales of recreational vehicles.
Analysts universally applauded the results and were surprised by the recent strength in RV sales, which they attributed to consumers’ desire to vacation while maintaining social distance.
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Camping World management noted that new customers appeared to be entering the market as well with trade-in rates dropping to 20% from the normal 30%-35%.
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Camping World benefited from a pivot to online sales, JPMorgan analyst Ryan Brinkman wrote in a note, saying the strategy was “unprecedented" and led to sales beginning to track positively year-over-year, capped by the strongest weekend ever in early May.
Baird analyst Craig Kennison, who more than doubled his price target to $14 from $6 while maintaining his neutral rating, said that outdoor activities can capture mind share as consumers shun crowded spaces.
KeyBanc analyst Brett Andres wrote that management’s tone was ‘very encouraging’ around both the retail stabilization displayed in the past few weeks, along with initial evidence it is seeing an emerging “staycation" benefit to retail sales.
Recreational vehicles and other outdoor leisure-related stocks gained in sympathy, including Winnebago Industries Inc, Thor Industries Inc., LCI Industries, and Patrick Industries Inc., as well as Polaris Inc., Johnson Outdoors Inc. and Brunswick Corp.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.