Bank of America Merrill Lynch issues a dour assessment of the U.S. RV industry.
"We lower our RV industry volume on continued sluggishness and the likelihood that demand was inflated over the past 4 years," reads the BAML sector summary. The firm lowers its 2020 wholesale shipment forecast to 379K units from 447K units. The retail forecast is clipped to 406K units from 467K units.
What about the support from the millennial generation? "We believe Millennials are more likely to buy used RVs or even rent RVs rather than owning, given the big-ticket, 100% discretionary nature of the purchase and a greater degree of comfort with the sharing economy," warns the firm.
BAML drops its price target on Camping World (CWH -1.9%) to $7 from $10, on Thor Industries (THO +0.5%) to $47 from $58 and on Patrick Industries (PATK -4.9%) to $36 from $51. All three are rated at Underperform. A look at the Quant ratings on the RV stocks isn't encouraging either, with PATK and THO at Bearish and CWH set at Very Bearish.
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