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Wunderlich Securities Downgrades Thor Industries to ‘Hold’

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Aug. 23 2016, Published 7:58 a.m. ET

Price movement

Thor Industries (THO) has a market cap of $4.2 billion. Its stock fell by 0.63% to close at $79.21 per share on August 19, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 1.6%, 6.9%, and 42.4%, respectively, on the same day. THO is trading 3.5% above its 20-day moving average, 11.0% above its 50-day moving average, and 29.8% above its 200-day moving average.

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Related ETFs and peers

The iShares Morningstar Small-Cap ETF (JKJ) invests 0.57% of its holdings in Thor Industries. The ETF tracks a market cap–weighted index of US small-cap core stocks. The index selects stocks from the 90%–97% market cap range that fall into Morningstar’s core style categorization. The YTD price movement of JKJ was 13.4% on August 19.

The Vanguard Small-Cap Value ETF (VBR) invests 0.17% of its holdings in Thor Industries. The ETF aims to track the CRSP US Small Cap Value Index. The index selects from a list of stocks in the 85%–99% market cap range, based on five value factors.

The market caps of Thor Industries’ competitors are as follows:

  • Berkshire Hathaway (BRK.A): $365.8 billion
  • Drew Industries (DW): $2.5 billion

Thor Industries’ rating

Wunderlich Securities has downgraded Thor Industries’ rating to “hold” from “buy” and set the stock’s target price at $80 per share.

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Thor Industries’ performance in fiscal 3Q16

Thor Industries reported fiscal 3Q16 net sales of $1.3 billion, a rise of 8.3% from net sales of $1.2 billion in fiscal 3Q15. In fiscal 3Q16, sales of its towable RVs (recreational vehicles) and motorized RVs rose by 1.7% and 20.7%, respectively, compared to fiscal 3Q15.

In fiscal 3Q16, the company’s gross profit margin and income from continuing operations before income taxes rose by 10.6% and 22.9%, respectively, compared to fiscal 3Q15.

Its net income and EPS (earnings per share) rose to $78.6 million and $1.49, respectively, in fiscal 3Q16, compared to $62.8 million and $1.17, respectively, in fiscal 3Q15.

In fiscal 3Q16, Thor Industries’ cash and cash equivalents and inventories rose by 34.8% and 11.9%, respectively, compared to fiscal 3Q15. Its current ratio and debt-to-equity ratio rose to 2.2x and 0.42x, respectively, compared to 2.1x and 0.41x, respectively, in fiscal 3Q15. In fiscal 3Q16, it reported consolidated RV backlogs of $1.1 billion, a rise of 51.3% compared to fiscal 3Q15.

In the next article in this series, we’ll take a look at Toyota Motor (TM).

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