Polaris (NYSE:PII) presents a balanced risk/reward opportunity to investors at present, according to Jefferies.
Jefferies analyst Anna Glaessgen wrote in an initiation note on Tuesday that while Polaris (PII) can be considered as a “safe harbor” in powersports, worsening consumer sentiment, persistent supply chain problems, and decelerating spending diminish the security of the stock. Overall, this leaves the stock likely range-bound, in her view.
“We believe Polaris deserves credit for shifting focus back toward its leadership in global powersports, seen not only in word but also in decisive action. In our view, this strategic refinement will ultimately benefit fundamentals as well as valuation, as the market rewards streamlined, clean stories,” Glaessgen explained. “However, these positives are balanced, in our view, by a challenging macro backdrop and signals of consumer health degradation.”
She added that while the pandemic caused outdoor recreation demand to surge, benefiting Polaris (PII), an increase in available activities after reopening stands to soften this growth trend.
She set a $105 price target for shares and initiated coverage on the stock at a “Neutral” rating.
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