BRP wins price target raise at Desjardins

Desjardins analyst Benoit Poirier reiterated his “Buy” rating on BRP (BRP Stock Quote, Chart, News, Analysts, Financials TSX:DOO) and raised his target price to C$138.00 from C$130.00 after the company’s fiscal fourth-quarter results beat expectations and as he introduced fiscal 2028 estimates.

As reported by the Globe and Mail, the analyst said the quarter supported a more constructive outlook for the shares, with results tracking toward the upper half of BRP’s normalized fully diluted EPS range of C$5.50 to C$6.50 for fiscal 2027. He also said the company is entering the year with manageable leverage, a refreshed product lineup and improving market share, helped in part by the launch of the Can-Am Defender HD11.

“Given DOO’s strong free cash flow and the recent share price decline, we believe the story is worth revisiting,” Poirier said. He noted BRP ended fiscal 2026 with leverage of 1.9x and said his forecasts call for free cash flow of C$805-million in fiscal 2027, C$819-million in fiscal 2028 and C$892-million in fiscal 2029. Based on that trajectory, he expects leverage to fall to 0.1x by fiscal 2029.

Poirier said BRP shares are down about 17% from their 52-week high and are trading at 6.2x his calendar 2027 EV/EBITDA estimate, an 18% discount to Polaris.

BRP reported fourth-quarter revenue of $2.46-billion, up 16.0% year-over-year, driven by a favourable ORV mix and higher ORV and personal watercraft shipments. Net income rose 190.7% to $45.8-million, while normalized EBITDA increased 47.3% to $363.8-million. Normalized diluted EPS came in at $2.21, up $1.16 from a year earlier. North American powersports retail sales rose 12%, while BRP posted market share gains in ORV and snowmobile and reduced North American network inventory by 17% for the full year.

For fiscal 2026, BRP reported revenue of $8.44-billion, up 6.8%, and said it exceeded its revised full-year guidance with normalized diluted EPS of $5.21. The quarter also included normalized impairment charges of $232.5-million tied to electric vehicle and light mobility assets, of which $28.5-million affected gross profit. BRP also repurchased $50.3-million of shares and raised its quarterly dividend to $0.25 per share.

“In just two months as CEO, I’ve already witnessed first-hand how BRP’s exceptional talent, combined with our engaged dealer network and powerful brands, holds immense potential,” president and CEO Denis Le Vot said. He added that BRP navigated a volatile tariff environment and tough competitive backdrop to deliver fiscal 2026 results above expectations, supported by strong fourth-quarter retail performance in ORV and snowmobiles.

Poirier also introduced fiscal 2029 estimates calling for revenue of C$9.9-billion, up 3% year-over-year, an EBITDA margin of 15.4%, up 40 basis points, and normalized fully diluted EPS of C$10.05. He said those forecasts could prove conservative if management continues to gain share and improve efficiency under Le Vot.

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