Motorhomes had an excellent 2021; More room to grow? – December 10, 2021
Construction Products – Mobile Homes & RV Builders industry is in the top 2% of industries ranked by Zacks. And for good reason.
For most of 2020, when people feared the pandemic, recreational vehicles were among the safe options that allowed people to get out. So many Americans have taken road trips like the good old days. Now, despite the fact that vaccines are available and most people have been vaccinated, this habit, like shopping online and working flexibly, seems to have continued. So rather than demand falling this year with the grand reopening, it seems to have exploded. Most of the major RV vendors reported strong results throughout the year. But the question is: will the good times last?
The RV Industry Association’s October 2021 survey shows total RV shipments ended the month at 57,971 units, an increase of 22.5% from October 2020 and 18% from the previous record October reached in October 2017. Production also set a record, surpassing the previous one. record of the month of 5%. The industry has already built more recreational vehicles this year than any other (and data for November and December will add to the total). And everything was done despite the supply chain and workforce issues. Towable motorhomes, led by conventional caravans, increased by 23.3%, motorhomes by 14.4% and model fleet motorhomes by 6.3%.
Plus, a recent survey shows more Americans are planning to go RVing in the next year than ever before. According to the survey, 72 million Americans plan a motorhome trip next year in a motorhome they own, rent or borrow, 18% more than the 61 million reported in the same survey there. a year ago.
The strength of the market is to some extent tied to millennials increasingly embracing a mobile lifestyle and the availability of campgrounds across the United States is a supporting factor. There is also a growing trend to rent RVs for special events and festivals, which is expanding the use case. The luxury segment seems particularly attractive in this regard. Rental fleets are therefore growing rapidly.
Some of the larger RV manufacturers are also in the prefab and modular housing business. This further adds to their growth prospects since the residential construction market is currently severely limited by supply.
In view of this context, the following actions are worth a closer look:
Skyline Champion Corporation (SKY – Free report)
Skyline is not pure RV game, although it does take a leading position in park RVs. It is actually best known for its manufactured homes (number 2 player in the US) and modular housing business (number one player in the US). Its share of the manufactured home market has grown from 8% to 17% over the past 10 years. Skyline also sells accessory housing units (ADUs) and modular buildings for the multi-family, hospitality, and senior and worker housing industries. Its products are marketed and distributed through a network of independent and company-owned retailers, community operators, government agencies and business developers.
In the year ending March 2022, Skyline is expected to increase revenue and profit by 47.5% and 117.0% respectively. Growth for the following year is expected to be 11.9% for revenues and 11.5% for profits. Estimates for both years have increased 64 cents (23.9%) and $ 1.02 (38.1%) over the past 60 days.
Skyline stocks carry a Zacks # 1 (strong buy) ranking and an A growth score.
Winnebago Industries (WGO – Free report)
Winnebago Industries is a leading producer of recreational vehicles and marine products sold in the United States and Canada. It also manufactures other specialized commercial vehicles tailored to specific needs, such as law enforcement command centers, mobile medical clinics and mobile offices.
After revenue and profit growth of 16.0% and 9.9%, respectively in the fiscal year ended August 2022, Winnebago is expected to grow 2.5% and 0.4%, respectively, on the year next. Estimates for both years are up $ 1.26 (15.5%) and 67 cents (7.7%) over the past 60 days.
Winnebago shares carry a Zacks Rank # 1 and a Growth Score A.
Cavco Industries (CVCO – Free report)
Cavco is one of the largest manufacturers of manufactured homes in the United States and a leading producer of park recreational vehicles, vacation cabins, and commercial structures built on systems. The emphasis is on energy efficiency through passive solar orientation, the use of renewable materials, high indoor air quality through specially designed ventilation systems and optimal use of space.
In the year ending March 2022, Cavco is expected to experience revenue and profit growth of 37.0% and 66.2%, respectively. Growth for the following year is expected to be 11.0% and 8.1% respectively. Over the past 60 days, the 2022 estimate jumped $ 2.01 (17.2%) while the 2023 estimate jumped $ 2.23 (17.7%).
Cavco shares carry a Zacks Rank # 2 and Growth Score A.
Patrick Industries (PATK – Free report)
Patrick Industries, Inc. is a leading manufacturer of components such as decorative vinyl and paper laminate panels, solid surfaces, granite and quartz countertops, aluminum products, wrapped vinyl moldings, paper and wood. hard, sliding trim and fascias, cabinet doors and components, fiberglass bathroom fittings, fiberglass and plastic bar systems and component products, wiring and wiring harnesses, and composite parts and liners polymer-based soil and others. It is also a distributor of products and building materials for the recreational vehicle, manufactured home and marine industries. It is also aimed at certain industrial customers.
Patrick’s income and profits are expected to grow 60.0% and 115.7% this year and 7.6% and 10.3% the following year. The 2021 estimate has increased from $ 8.61 to $ 9.06 (up 4.9%) in the past 60 days while the 2022 estimate has increased from $ 9.53 to $ 9.99 ( up 4.8%).
Patrick shares carry a Zacks Rank # 2 and Growth Score A.
Thor Industries (THO – Free report)
Thor Industries is the world’s largest manufacturer of recreational vehicles. The company builds a variety of recreational vehicles in North America and Europe, and sells these vehicles and related parts and accessories to independent, non-franchised dealers in the United States, Canada and Europe.
In the year ending July 2022, analysts predict that Thor’s revenue and profit will increase by 14.7% and 14.4% respectively. In 2023, this growth should reach 2.5% and 2.5% respectively. The 2022 estimate is up 19.3% over the past 90 days. The estimate for 2023 is up 15.0%.
Thor shares carry a Zacks Rank # 2 and a Growth Score A.