Skip to main content

Market Overview

Amid Gun Sale Slowdown, How Should You Play Sturm, Ruger?

Amid Gun Sale Slowdown, How Should You Play Sturm, Ruger?

Now may be the time for Sturm, Ruger & Company (NYSE: RGR) to take advantage of the stock’s 7.8 percent gain this year and lock in some profits. BB&T analyst Brian Ruttenbur has downgraded the stock from Buy to Hold and sees a cyclical downturn ahead for gun makers.

While BB&T sees tough times ahead for gun makers, Ruttenbur noted that the firm is choosing a Hold rating rather than a Sell rating because he still sees Sturm, Ruger & Co as the best name in the business.

“We believe the company has the strongest financial structure in the industry and can weather the downturn with a solid balance sheet (over $80 million in cash) and strong free cash flow (expected at $96 million in 2016 and $73 million in 2017),” Ruttenbur explained.

Related Link: Why The May Jobs Report Should Be 'Taken With A Grain Of Salt'

The company’s strong financial positioning is one of the main reasons why BB&T sees Sturm, Ruger & Co as well-positioned to repeat the market share gains it achieved during the last cyclical downturn in the gun industry.

Last week, the NICS data for the month of May was up only 2.6 percent year-over-year. Last year, NICS growth was up more than 10 percent in June and 15 percent in July, which makes for some extremely difficult upcoming comps.

BB&T has also lowered its 2016 revenue estimates from $643.9 million to $622.8 million and its 2016 EPS estimates from $4.21 to $3.78.

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for RGR

Sep 2020Aegis CapitalInitiates Coverage OnHold
Aug 2017Aegis CapitalInitiates Coverage OnBuy
Mar 2017WunderlichInitiates Coverage OnHold

View More Analyst Ratings for RGR
View the Latest Analyst Ratings


Related Articles (RGR)

View Comments and Join the Discussion!

Posted-In: BB&T Brian Ruttenbur NICSAnalyst Color Downgrades Price Target Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

NIUDaiwa CapitalInitiates Coverage On41.5
QMCONorthland Capital MarketsInitiates Coverage On12.0
IBKRJefferiesInitiates Coverage On89.0
MRETFTD SecuritiesDowngrades18.5
SWKSGoldman SachsDowngrades135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at