BRP -- The Essentials

BRP logged a 1.8% change during today's afternoon session, and is now trading at a price of $75.34 per share. The S&P 500 index moved 1.0% and the Nasdaq posted a 1.0% change.

BRP shares moved -10.8 over the last 52 weeks, with a high of $90.42 and a low of $58.71. BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in North America, Europe, Australia, New Zealand, and Latin America. The mid-cap Consumer Cyclical company has 23,000 full time employees and is based in Valcourt, Canada. BRP has returned a 0.9% dividend yield over the last 12 months.

Exceptional EPS Growth with Healthy Leverage Levels:

2020-01-31 2021-01-31 2022-01-31
Revenue (MM) $6,053 $5,953 $7,648
Revenue Growth n/a -1.65% 28.47%
Gross Margins 24.0% 24.7% 27.9%
Gross Margins Growth n/a 2.92% 12.96%
Operating Margins 9.5% 11.2% 15.4%
Operating Margins Growth n/a 17.89% 37.5%
Net Margins 6.14% 6.1% 10.38%
Net Margins Growth n/a -0.65% 70.16%
Earnings Per Share $3.96 $4.1 $7.69
EPS Growth n/a 3.54% 87.56%
Diluted Shares (MM) 94 89 37
Free Cash Flow (MM) $225 $674 $72
FCF Growth n/a 199.96% -89.28%
Capital Expenditures (MM) -$331 -$280 -$698
Net Debt / EBITDA 1.99 1.17 1.28

BRP Is Reasonably Valued:

Compared to the Consumer Cyclical sector's average of 22.33, BRP has a trailing twelve month P/E ratio of 9.8 and, according to its EPS guidance of 10.03, an expected P/E ratio of 7.5. BRP's PEG ratio is 0.24 based on its 40.67% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by BRP's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.75, which still suggests that company's shares are possibly undervalued.

BRP's P/B ratio is 11.1 compared to its sector average of 3.12. The company is likely overvalued in terms of its equity.

BRP's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.

Most of the Market Indicators on BRP Are Negative:

3 analysts are following BRP and have set target prices ranging from $85.36 to $132.96 per share. On average, they have given the company a rating of buy. At the current price of $75.34, DOOO is trading -29.31% away from its average analyst target price of $106.58 per share, implying an analyst consensus of strong upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.