IBD Stock Analysis
- Winnebago flashed a buy signal by breaking a short downtrend.
- Shares are also bouncing above the 50-day line, another bullish sign.
- The stock is consolidating with a 87.63 entry as well.
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:27PM EDT on
Winnebago (WGO) is the IBD Stock Of The Day as demand for recreational vehicles looks to persist even as the pandemic fades. WGO stock flashed an early buy signal after clearing resistance at a key technical level.
Iowa-based Winnebago benefited from a pandemic surge in RV sales. Americans averse to flying with others in confined spaces packed into RVs and motor homes. They craved the outdoors but wished to travel the country in a safe way.
But even as travel restrictions ease, Covid-19 cases fall, and vaccinations rise, RVs have not lost their momentum. Indeed, the RV Industry Association reported Monday that wholesale RV shipments in North America set a fresh record of 148,507 units in Q1, about 10% higher than the prior record from 2018. But even before the pandemic, RV sales had seen a roughly decade-long boom.
In December, Winnebago CEO Michael Happe told CNBC that he expects the pandemic-fueled demand for RVs to last into 2021.
He added that his customers are getting younger and more diverse. And they’re using the products in many different ways — not just for recreation.
“The work-from-anywhere trend is quite strong right now, and a lot of our new consumers are seeing these products as a way to work from the road or a beautiful campground somewhere here in America.”
WGO Stock Technical Analysis
Shares jumped 6.6% to 82.57 on the stock market today, breaking a short-term downtrend. WGO stock is also bouncing off support at the 50-day line, according to MarketSmith chart analysis. The bullish moves represent an early buy signal.
WGO stock is also consolidating with a buy point of 87.63 that can be seen on the weekly chart.
The relative strength line rallied at the start of 2021 but has since flattened out. A rising RS line means that a stock is currently outperforming the S&P 500 index. It is the blue line in the chart shown.
Its IBD Composite Rating, which combines key fundamental and technical metrics in a single easy-to-use score, is a superior 96. Winnebago is the No. 2 stock in its industry group — Building-Mobile, Manufactured and RVs — behind Patrick Industries.
WGO stock shows one quarter of rising fund ownership, according to the IBD Stock Checkup tool.
Winnebago Earnings and Fundamentals
The RV maker has handily beaten earnings expectations the last four quarters in a row.
Over the past three quarters, Winnebago grew earnings 131% on average, far above the 3% annual pace over the past three years. In fact, the company shows three quarters of accelerating earnings growth, capped with a 216% gain in the latest quarter.
Sales ranged between 34% and 39% over the last three quarters, also above the three-year average of 11%.
Analysts on Wall Street see Winnebago earnings per share vaulting 181% to $7.24 as sales jump 41%, according to Zacks Investment Research.
Seven analysts rate Winnebago stock a buy, two have a hold and none has a sell, Zacks says.
The RV market is practically synonymous with Winnebago. And Winnebago Industries’ share has risen to 12% of U.S. sales from just 3% five years ago, according to Forbes.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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