MIAMI – Following an investor meeting ahead of the Miami International Boat Show, RBC Capital Markets Corp. analyst Edward Aaron said in a note that he continues to see a good risk/reward ratio on Brunswick Corp., given the company’s leverage in the case of a recovery in demand and a limited downside, thanks to improved liquidity.
While demand remains low, Aaron reports that Brunswick management seemed comfortable with plans for retail down 10 percent. He also said he sensed pricing expectations were being met, which he sees as a critical factor to the company’s 2010 success. He is predicting an 11 percent average selling price growth forecast for the boat segment.
Aaron’s other observations included that the high end of the boat market is performing better in relative terms; liquidity and access to financing have become a competitive advantage for Brunswick, with a dealer base that has shrunk less than the industry as a whole; and that Brunswick is making progress toward a common-platform engineering model that could provide a long-term economic advantage.
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