Time To Jump On Thor's Road To 'Profitsville'?

• On Tuesday, BMO Capital Markets upgraded shares of Thor Industries, Inc. THO from Market Perform to Outperform.
• The firm also revised its price target upwards, from $56 to $60.
• Shares of Thor Industries are up roughly 1 percent on Tuesday trading.

Although Thor recently reported “muddy” fourth quarter results, BMO analysts Gerrick L. Johnson and Kenny Lee think, “retail trends continue to be overwhelmingly positive and dealers remain quite optimistic.”

Moreover, the experts believe the company is profiting from an ongoing replacement cycle (driven by low interest rates, surging home prices and innovation), the aging and retiring of U.S. citizens, an overall recuperation in the popularity of RVs among younger demographics and families, as well as attractive new products.

According to the report, a few factors make Thor share an attractive investment option. Namely:

• The recent pullback in the stock, which tumbled almost 20 percent over the past six months
• Very positive feedback from recent RV shows
• Continued strength in retail sales
• An ameliorating gross margin outlook
• More clarity regarding the recently ended quarter
• An “attractive” valuation of just 11 times the firm’s calendar 2016 EPS estimate of $4.61 and 11.7 times its fiscal 2016 EPS estimate of $4.35

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.