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Malibu Boats Dips 6% On Sales Outlook; Street Bullish

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Shares of Malibu Boats closed 6.1% lower on Friday after the maker and seller of sports boats provided a weaker-than-expected revenue outlook for fiscal 2021. The company forecasts its fiscal 2021 sales to increase approximately 20% year-on-year, while Wall Street is projecting revenue growth of almost 21.9%.

Meanwhile, Malibu Boats' (MBUU) 1Q top and bottom-line showed year-over-year improvement. The company’s 1Q revenue grew 5.2% to $181 million and surpassed the Street’s estimates of $177.5 million. Adjusted earnings in the reported quarter jumped 36.1% to $1.13 per share year-on-year and came ahead of analysts' expectations of $0.87.

The company’s CEO, Jack Springer said, “We benefited from the hot retail environment, customer desire for larger boats with more features and options, and flawless execution of our operational excellence initiatives.” (See MBUU stock analysis on TipRanks).

Following the earnings release, Berenberg Bank analyst Alex Maroccia reiterated a Buy rating with a price target of $77 (38.2% upside potential). In a note to investors, Maroccia wrote, “we believe this was a strong start to FY2021 for the company, and we are optimistic that improvements in the supply chain could lead to significant outperformance versus the company's sales guidance.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 6 Buys and 1 Hold. With shares up over 36% year-to-date, the average price target of $69.17 implies further upside potential of about 24.1% to current levels.

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