UPDATE: Wunderlich Securities Initiates Coverage on Arctic Cat with Hold Rating, $34 PT on Increased Competition in Side-by-Sides

In a report published Friday, Wunderlich Securities analyst Rommel Dionisio initiated coverage on

with a Hold rating and $34.00 price target. In the report, Wunderlich Securities noted, “We are initiating coverage of Arctic Cat Inc. (ACAT) with a Hold rating and $34 price target, derived using an EV/2015E EBITDA multiple of 6.0x. Arctic Cat has successfully grown its off-road vehicle business the past several years by expanding its product line in the faster-growing side-by-side (2+ seat) segment, while maintaining a strong presence in single-seat all-terrain vehicles (ATVs). Meanwhile, its snowmobile business has also grown, partly due to a new contract to become the outsource producer of sleds for competitor Yamaha (YAMCYNR). However, recently increased pressure in side-by-sides from competitive product launches, combined with uncertainty as the company searches for a new CEO and CFO, result in our cautious near-term outlook on the stock.” Arctic Cat closed on Thursday at $34.10.