Wedbush Adds Brunswick Corp. to 'Best Ideas' List

Ahead of boat season, Wedbush Securities added Brunswick Corporation BC to its "Best Ideas" list. The analysts pointed to their "most recent round of boat dealer channel checks as well as positive industry data points" as the main reasons underlying the Outperform rating and 5 percent price target increase.

While Wedbush said it is encouraged by the entire U.S. boat industry, it believes that Brunswick "will gain significant market share in 2015 and beyond." That should help the stock, which is 2.8 percent higher for the year, to move to Wedbush's $63 price target.

According to new data from Statistical Surveys Inc, which Wedbush cited in the note, the market for high-margin cruisers and yachts are outperforming other segments of the boat industry. Further, Wedbush now believes that the Q1 new boat unit sales growth could be 15 to 16 percent, up from a previously estimated 14 percent. Specifically, the analysts noted that "Brunswick's and MarineMax Inc's HZO key segments (cruisers and yachts) have seen the industry's strongest growth early in the year

Wedbush now expects Brunswick to earn $0.62 in Q1 and $2.90 for the year. That is $0.02 higher than prior estimates.

The $63 price target, Wedbush said, reflects a 17x multiple on its 2016 EPS estimate, "matching the multiple afforded the S&P." Brunswick, the analysts pointed out, has historically traded in line with this multiple.