KeyBanc Capital Markets downgraded Camping World Holdings Inc CWH to Sector Weight from Overweight, saying the recent rally in shares have appropriately priced in recent acquisitions as well as solid industry momentum.
Camping World Vs. SPY
Analyst Scott Hamann noted shares have gained 62.7 percent since his initiation report on Nov. 1 versus 12.5 percent gain of the S&P 500 in the same period.
“While CWH has compelling growth prospects, and we believe that there is upside potential to current Street estimates given continued dealer acquisitions and solid industry momentum, we believe that the risk/reward is appropriately balanced with only modest potential upside from current levels,” Hamann wrote in a note.
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Analyst's Take On Future Growth
Hamann believes solid unit growth should continue during 2017 following a solid 11–12 percent increase in new towable and motorhome industry registrations in 2016.
The analyst also raised his FY 2016, 2017 and 2018 EPS estimates to $1.49/ $1.84/$2.00 from $1.43/$1.75/$1.93. The consensus estimate calls for EPS of $1.55 and $1.73 for 2016 and 2017.
“Further, our relative valuation thesis has played out as CWH is trading at a 5.7x premium to the RV manufacturers, which is above our 3-5x target range,” Hamann added.
At last check, shares of Camping World had fallen 3.11 percent to $35.26.
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