WGO – Management’s confidence about their costs, balance sheet, and inventory imply that market expectations are overly bearish, suggesting that longer-term upside remains warranted

• • • Winnebago Industries (WGO:USA)currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 13.5x Uniform P/E. At these levels, markets have bearish expectations for the firm, despite bullish expectations from analysts, and given management’s confidence about their costs, balance sheet, and inventory, further upside may be warranted
    • Specifically, management is confident in their fixed-cost leverage improving margins, and in their Outlook product. Additionally, they are confident in the RVIA’s updated forecast for 2018, and in the increasingly positive state of their balance sheet. Furthermore, they are confident in their focus on achieving their 10%-plus operating income goal, and in Grand Design’s inventory turns. Moreover, they are confident in making their employees larger owners of the company through the recently announced employee stock purchase plan