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Here's Why We Expect Thor (THO) to Deliver Q2 Earnings Beat

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Thor Industries THO is set to release second-quarter fiscal 2021 results on Mar 9, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.60 and $2.55 billion, respectively.

The leading recreational vehicle (RV) maker posted better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues across all segments. Over the trailing four quarters, Thor surpassed the Zacks Consensus Estimate on three occasions and missed once, with the average surprise being 70.9%. This is depicted in the graph below:

Thor Industries, Inc. Price and EPS Surprise

Thor Industries, Inc. Price and EPS Surprise
Thor Industries, Inc. Price and EPS Surprise

Thor Industries, Inc. price-eps-surprise | Thor Industries, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for fiscal second-quarter earnings per share has been revised upward by 3 cents in the past 30 days. This compares favorably with the year-ago earnings of 67 cents per share, indicating a whopping 138.8% rise. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 27.2%.

Earnings Whispers

Our proven model predicts an earnings beat for Thor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Thor has an Earnings ESP of +3.40%. This is because the Most Accurate Estimate of $1.65 per share is 5 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Thor Industries — whose peers include Winnebago Industries WGO, REV Group, Inc. REVG and LCI Industries LCII — carries a Zacks Rank of 2 currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Factors at Play

With RVs seeming to be the safest travel option amid the socially distant milieu, demand and sales for Thor’s products are expected to have risen year over year. Importantly, the quarterly results are expected to benefit from the acquisition of Erwin Hymer Group and TiffinHomes. Apart from higher sales, Thor’s earnings are also likely to have got a boost from increased focus on operational efficiency.

The Zacks Consensus Estimate for second-quarter fiscal 2021 revenues from the North American Motorized RVs segment is pegged at $416 million, indicating a rise from $344 million recorded in the comparable year-ago period. The consensus mark for revenues from the North American Towable RVs unit is $1,272 million, implying a year-over-year increase of 29.3%. The Zacks Consensus Estimate for revenues from the European RVs segment is pegged at $660 million, signaling an uptick from $637 million recorded in second-quarter fiscal 2020.

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