The post-earnings sell-off in Polaris (NYSE:PII), exacerbated by a sell-side downgrade presents an attractive entry point and positions the stock to outperform investor expectations moving forward, according to a research note from DA Davidson analysts Brandon Rolle and Griffin Bryan.
The duo recently upgraded the stock to Buy from Neutral and lifted their price target by 16% to $87.
“The second quarter proved challenging as our industry continued to contend with elevated interest rates, inflation, and an increasingly cautious dealer and consumer,” CEO Mike Speetzen said, to address the disappointing full year outlook.
But since the quarterly report, bargain-hunting has moved the stock off the 52-week low of $71.90 and back into the green for the week.
Although the guidance cut was more than Rolle and Bryan anticipated, a reset was needed given the state of dealer inventories. But looking ahead to FY25, Polaris (PII) is expected to continue driving incremental operational efficiencies, with potential retail recovery presenting additional upside to the stock price.
Analysts are split on Polaris (PII) with Seeking Alpha authors rating it as a Hold, but Wall Street analysts giving the stock a Buy rating. Seeking Alpha’s Quant Rating also views Polaris (PII) as a Hold.