On Wednesday, Thor Industries Inc. (NYSE:THO) maintained its Hold rating according to an Argus analyst, following the company's issuance of a weaker-than-expected fiscal fourth-quarter guidance. The recreational vehicle (RV) manufacturer's shares have seen a 7% decline over the past three months, underperforming the S&P 400, which fell by 1% during the same period.
Thor Industries recently announced fiscal third-quarter 2024 results, which surpassed consensus expectations yet showed a 5% decrease. The company has again revised its full-year 2024 guidance downward, reflecting multiple challenges it is currently facing. Higher interest rates, increasing costs, and persistent supply-chain issues are among the pressures cited. Additionally, the U.S. market is experiencing a notable drop in demand for RVs, along with pricing pressures.
The company's ongoing investments in research and development (R&D) are expected to affect earnings per share (EPS) in fiscal year 2024 but are anticipated to contribute to improved performance in the longer term. In light of these factors, Argus has lowered its EPS estimate for Thor Industries for fiscal year 2024 to $4.75 from the previous forecast of $5.27. Furthermore, the fiscal year 2025 EPS estimate has been adjusted to $6.75 from $8.00.
Thor Industries' strategic focus on R&D investments indicates a commitment to future growth, despite the immediate impact on its financial outlook. The company's revised earnings estimates and the cautious guidance reflect the current economic headwinds and market dynamics affecting the RV industry.
In other recent news, Thor Industries reported a significant shortfall in its fiscal second-quarter earnings and revenue, posting earnings per share of $0.13 and revenue of $2.21 billion, both falling below analysts' expectations. Despite this, the company maintains a revised full-year fiscal 2024 guidance, expecting consolidated net sales to range between $10.0 billion and $10.5 billion. In addition, Thor Industries has declared a regular quarterly cash dividend of $0.48 per share.
Several analyst firms have adjusted their outlooks on Thor Industries. BMO (TSX:BMO) Capital maintained an Outperform rating, citing the company's strategic positioning to benefit from a potential upswing in retail demand. Citi, while lowering its price target for the company to $113 from $120, maintained a Buy rating. Baird reduced its price target to $110 from $120, yet kept an Outperform rating. Roth/MKM held a cautious stance, maintaining a Neutral rating and an $87.00 price target.
InvestingPro Insights
Amidst the challenging landscape for Thor Industries Inc. (NYSE:THO), recent data from InvestingPro provides a deeper financial perspective. The company's market capitalization stands at $5.19 billion, with a P/E ratio of 19.12, which adjusts slightly to 19.44 when considering the last twelve months as of Q3 2024. Despite the pressures faced, Thor Industries boasts a noteworthy dividend yield of 2.01%, with an increase of 6.67% in dividend growth during the same period. This is indicative of the company's commitment to shareholder returns, having raised its dividend for 9 consecutive years.
InvestingPro Tips suggest caution with Thor Industries, as analysts have revised their earnings downwards for the upcoming period, and a decline in sales is anticipated for the current year. However, the company's liquid assets exceed short-term obligations, and it operates with a moderate level of debt, which may provide some financial stability. For readers looking to delve further into Thor Industries' financial health, there are over 10 additional InvestingPro Tips available, which can be explored with a subscription. Utilize the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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