January 30, 2019

WGO – Management’s confidence about revenue growth, product launches, sales targets, and portfolio imply that market expectations are overly bearish, and upside is warranted


  • Winnebago Industries (WGO:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 9.2x Uniform P/E. At these levels, markets have overly bearish expectations for the firm, and given management’s confidence in organic revenue growth, travel trailer launches, their ability to meet sales targets, and portfolio construction, further upside is warranted
  • Specifically, management is confident about the pace at which WGO is growing organically. Additionally, management is confident about their travel trailer launch, and their ability to maintain a stable level of warranty expenses. Moreover, management is confident in their ability to reach sales and profit targets despite competitive discounting headwinds. Finally, management is confident about their cost restructuring following the Great Recession
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