BC
Brunswick Corp.
Consumer
08/16/2023
Presented
| Date | 08/08/2023 |
| Price | $84.69 |
| Market Cap | $5.91B |
| Ent Value | $8.27B |
| P/E Ratio | 11.13x |
| Book Value | $30.02 |
| Div Yield | 1.81% |
| Shares O/S | 69.83M |
| Ave Daily Vol | 637,370 |
| Short Int | 5.56% |
Current
| Price | $83.36 |
| Market Cap | $5.52B |
| Brunswick Corp. engages in the design, manufacture, and marketing of recreational marine products, including marine engines, boats, and parts and accessories for those products. It operates through the following segments: Propulsion, Parts and Accessories, Boat, and Corporate/Other. The Propulsion segment manufactures a full range of outboard, sterndrive, and inboard engines, as well as propulsion-related controls, propellers, and rigging parts and accessories. The Parts and Accessories segment supplies engine parts and consumables, such as oils and lubricants, electrical products, boat parts and systems. The Boat segment designs and makes boats and products such as Sea Ray sport boats and cruisers, Bayliner sport cruisers, runabouts, Heyday wake boats, Boston Whaler fiberglass offshore boats, Lund fiberglass fishing boats, Crestliner, Cypress Cay, Harris, Lowe, Lund, and Princecraft aluminum fishing, utility, pontoon boats, and deck boats, and Thunder Jet heavy-gauge aluminum boats. The Corporate/Other segment includes corporate staff and administrative costs, investments in technology solutions, business development and other growth-related expenses, including IT enhancements. The company was founded by John Brunswick in 1845 and is headquartered in Mettawa, IL. |
Publicly traded companies mentioned herein: Brunswick Corp (BC)
Highlights
The presenter is long shares of Brunswick Corp (BC), seeing a compelling setup with the stock essentially trading at a trough multiple on trough earnings following a significant sales decline in retail boat units exiting the pandemic. The company manufactures boats, boat parts, and engines with ~50% of the company’s operating income coming from the manufacture and sale of boat engines (Propulsion), ~30% from the sale of parts and accessories (Engine P&A), and ~20% from boat manufacturing (Boat). Even in a weak environment and with additional headwinds from a recent cybersecurity incident, the company is guiding to $9.50 EPS this year, which is more than double the $4.33 generated in 2019. BC is growing earnings cycle-over-cycle primarily through market share gains (particularly in high horsepower engines), operating leverage, and capital deployment in the forms of M&A and share repurchases. At the current $85 share price, the stock is trading at 9x 2023 earnings. As the industry’s unit sales trends inflect positively next year, the presenter expects a favorable rerating and sees 100%+ upside over the next two years based on a 14x EPS valuation.
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