January 30, 2018

WGO – Markets have less bullish expectations for WGO than analysts project, and management’s confidence in their product development and initiatives imply this is likely unwarranted


  • Winnebago Industries, Inc. (WGO:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 13.9x Uniform P/E. At these levels, markets have only somewhat optimistic expectations for the firm post-Grand Design, which is less bullish than analyst projections, and further upside may be warranted given management’s confidence about their product development and initiatives
  • Specifically, management is confident in their new, impactful product development culture in their flagship Winnebago brand, and in their new Class A Diesel Horizon after it was awarded RV of the Year by RV Business magazine. Additionally, they are confident in their focus on a 3-year planning horizon, which includes goals related to employee training, and in the future turns of their Towable segment as a result of decreasing inventory aging. As such, equity is likely fairly valued at worst, with the potential for material further upside for WGO should they succeed in integrating their recent acquisition as analysts expect
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