Camping World Holdings Inc (NYSE: CWH) shares were crushed Thursday, one day after reporting a second-quarter earnings miss. The RV retailer reported second-quarter earnings of 46 cents per share, missing estimates by 23 cents.
JPMorgan analyst Ryan Brinkman downgraded Camping World from Overweight to Neutral after “yet another significant pairing of earnings estimates amidst softer end-markets."
A deterioration in Camping World's profitability has accelerated in recent quarters could get worse in the second half of 2019, the analyst said.
JPMorgan downgraded Camping World from Overweight to Neutral and lowered the price target from $19 to $11.
Credit Suisse analyst Seth Sigman maintained a Neutral rating on the stock and lowered the price target from $13 to $11.
While some of the incremental pressures Camping World is facing may be viewed as transitory, weak new RV demand remains concerning, with limited signs of improvement, the analyst said.
"Meanwhile, we have been disappointed by the de-leverage in the model on the back of double-digit new RV unit comp declines, as margins have compressed significantly more than management previously discussed and our sensitivity work had illustrated."
Camping World has a compelling long-term store growth story, but the company needs signs of stabilizing new RV sales, a rationalized and refocused inventory strategy and additional progress on the cost side, according to Credit Suisse.
Well Fargo analyst Timothy Conder maintained an Overweight rating on Camping World and lowered the price target from $12 to $10.
“Given year-to-date industry retail trends with weaker June data, we believe investors will remain in a ‘wait and see’ mode until there is better visibility on (1) industry trends getting less bad through year-end and (2) internal execution primarily on non-RV inventory clean-up,” the analyst said.
While Conder said he expects industry channel inventory recalibration to continue through at least the third quarter, Camping World said the company’s RV vehicle inventory is in its best position in several periods, with same-store new inventory down 10% year-over-year.
Camping World shares closed Thursday down 16.01% at $8.71.
Analyst: Camping World Could Have Near-Term Benefits From RV Production Slowdown
Camping World Analyst Downgrades RV Dealer After 'Challenging' Q1
Photo by PeRshGo/Wikimedia.
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