Stock of the Week: BRP

Want a Sea-Doo? Get in line

Andrew Willis 31 May, 2021 | 4:28AM
Facebook Twitter LinkedIn



See more Stock of the Week episodes here

Andrew Willis: As Sea-Doo season is about to kick-off and the backlog of orders for the recreational vehicles grows larger, how’s BRP doing? Is it benefitting from our desire to make this summer much better than last year?

We think fiscal 2022 should be another banner year for the company as we get back outside, and demand for ATVs and personal watercraft picks up. Dealer inventory can’t keep up right now. But investors should be most excited about long-term developments.

Senior Equity Analyst Jaime Katz says BRP’s strategic priorities should improve the firm’s competitive positioning to help sustain its sales success. BRP is set apart thanks to its focus on lean operations, the cultivation of an engaged workforce, and manufacturing processes that allow it to respond quickly to changing consumer tastes.

Right now, the stock is overvalued, but we don’t see the market as far off from what it’s worth. Our base case sees the company’s strategies, exemplary capital allocation, strong brand and leading market share resulting in competitive returns.

And then there’s product innovation, where we see new differentiated offerings in the marine segment, and electric vehicle offerings in all segments by 2026. With a narrow moat and industry-leading market share, we see BRP benefitting from the end of lockdowns for years to come.

For Morningstar, I’m Andrew Willis


Editor's Note: All images are courtesy of and AP Images. 

Passionate about Investing in New Ideas?

Explore the latest Global Thematic Fund Landscape report here

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BRP Inc97.02 CAD1.72Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy       Disclosures        Accessibility