Brunswick downgraded by analyst, shares fall
A Raymond James analyst downgraded Brunswick Corp. (NYSE: BC), parent of Life Fitness and Hammer Strength, saying the company still has earnings potential but faces soft retail sales in the first quarter. Its shares fell as much as 6 percent.
Looking into Brunswick’s core boat market, Raymond James analyst Joseph Hovorka told clients in a research note that recent checks of boat registration data in top markets like Florida, Texas and North Carolina show the reversal of a yearlong strengthening trend in the industry.
Hovorka cut his rating on the company to "market perform" from "outperform."
In the client note, he wrote that the company's shares have been rising as investors like the positive sales trends, improved dealer inventory levels and better balance sheet for the company.
He added that the company's earnings power "remains significant" because the company's costs are improving. But he said shares could be volatile because of timing of the company's peak earnings.
"We believe a reversal of the strengthening trend in retail may cause investors to reassess the timing of earnings recovery," he wrote.
Following the downgrade on April 1, shares of Brunswick fell as much as $1.03, or 6.4 percent, to a day’s low of $14.94. It closed at $15.73 with a volume of 3.15 million.
--Compiled by Wendy Geister
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