Bearish stock to watch: BRP Inc (NASDAQ: DOOO)

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BRP Inc (NASDAQ: DOOO) stock plunged 8% on 22nd, March, 2019 (Source: Google finance) due to lower than expected forecasts. For FY 20, DOOO is expecting total revenues’ growth to be up between 7% and 11%. The company expects the FY20 CapEx to be between $360 million and $370 million. Moreover, the North American powersport retail sales for the year were up 11% compared to an industry that was up low single digit, when excluding snowmobile, which experienced very strong growth last year. There was some economic weakness in certain regions of the world, such as the Middle East and countries like Argentina and China, while retail growth was 8% in Latin America, 6% in EMEA and 2% in Asia-Pacific.

Bearish stock to watch: BRP Inc (NASDAQ: DOOO)

On the other hand, the North American powersports retail sales were up 16% in an industry that was down low single-digit. This strong performance is the result of the ability to push technologies and innovation to create market shaping product, as well and the focus on offering the best value proposition for dealers driving excellent support from the dealer network. Further, Can-Am off-road and on-road product lines continued to outpace their respected industry. Ski-Doo and Sea-Doo both grew low single-digit in the quarter, performing in line with the industry. Moreover, in FY 19, DOOO extended into new markets with the acquisition of two boat companies, Alumacraft and Manitou, and the opening of an office in Russia. The company continued the deployment of the 2020 plan across the manufacturing sites with added capacity in both Juarez 2 and Queretaro, and the company actively managed the capital structure and improved shareholders’ return with $280 million of capital to shareholders through share repurchase and dividend. DOOO has declared quarterly dividend of $0.10 per share for share holders.

DOOO in the fourth quarter of FY 19 has reported the adjusted earnings per share of 84 cents, beating the analysts’ estimates for the adjusted earnings per share of 83 cents, according to Thomson Reuters Eikon. The company had reported the adjusted revenue growth of 17.8 percent to $1.51 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $1.41 billion. The revenue growth is due to strong growth in year around and seasonal product. The normalized EBITDA was up 22% to $656 million, resulting in a normalized earnings per share came in above the guidance range at $3.10, representing impressive growth of 37% over last year.

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