Pullback in 'Financially Disciplined' Thor Industries Creates Entry Point, Argus Says In Upgrade

Recreational vehicle manufacturer Thor Industries, Inc. THO is a "financially disciplined" company, and its undervalued shares offer a reason to buy the stock, according to Argus. 

The Analyst

Analyst Jim Kelleher upgraded shares of Thor Industries from Hold to Buy with a price target of $143.

The Thesis

Thor has a diverse product range and strong positioning in both the towable and motorized categories, Kelleher said in a Friday note.

The company is attracting younger buyers with innovative technology and lower-cost RVs, while also serving its core demographic of mature adults and retirees, the analyst said.

To reflect the improving financial positioning of the company, Kelleher raised the financial strength rating on the company from medium-high to high. Thor has lowered its long-term debt by 45 percent over the last two quarters.

Thor has grown earnings through economies of scale, the analyst said. 

"We like the company's financial discipline, which stresses positive cash flow generation in all divisions and in all economic environments," Kelleher said. 

"The company has been profitable every year since its inception in 1980 and has a long history of returning cash to shareholders through dividends and share repurchases." 

The Price Action

Thor shares are up about 25 percent over the past year, although they have shed about 19 percent year-to-date period.

The stock was rallying 3.63 percent to $125.12 at the time of publication. 

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Posted In: ArgusJim KelleherRecreational VehiclesRVsAnalyst ColorUpgradesPrice TargetAnalyst Ratings