BC

Brunswick Corp

Consumer


Presented:04/26/2019
Price:$50.45
Cap:$4.39B
Current Price:$83.36
Cap:$5.52B

Presented

Date04/26/2019
Price$50.45
Market Cap$4.39B
Ent Value$5.00B
P/E Ratio16.9x
Book Value$18.24
Div Yield1.67%
Shares O/S87.04M
Ave Daily Vol989,713
Short IntN/A

Current

Price$83.36
Market Cap$5.52B
Brunswick Corp. engages in the design, manufacture, and marketing of recreation products, including marine engines, boats, fitness equipment, and active recreation products. It operates through the following segments: Marine Engine, Boat, and Fitness. The Marine segment manufactures and sells recreational marine engines and marine parts and accessories. The Boat segment produces and markets boats such as fiberglass pleasure, sport cruiser, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, and heavy-gauge aluminum. The Fitness segment designs, manufactures and markets fitness equipment, including treadmills, total body cross-trainers, stair climbers and stationary exercise bicycles, and strength-training equipment. The company was founded by John Brunswick in 1845 and is headquartered in Mettawa, IL.

Publicly traded companies mentioned herein: Brunswick Corp/DE (BC), Citigroup Inc (C), Planet Fitness Inc (PLNT)

Highlights

The presenter is long shares of Brunswick Corp/DE (BC), which operates in three segments within the active recreation market. The marine engines segment consists of Outboard Engines (e.g., Mercury brand), as well as Parts and Accessories; BC’s Boat OEM and Boat Manufacturing business includes brands such as Boston Whaler and Sea Ray; and the Commercial Fitness Equipment segment includes Life Fitness, Cybex, and Hammer Strength. The stock is down more than 30% from its 52-week high due to investor fatigue and, more recently, industry concerns. Despite the negative sentiment, the presenter views the current share price of ~$48 and earnings multiple of ~10x as undervalued. He anticipates multiple expansion coming from cleaner financials and a clearer business path, along with earnings surprises to the upside. This leads him to a price target of $60 – $75 with downside in the mid- to low-$40s range, a risk/reward profile he finds attractive.

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Idea Discussion

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