BC changes
Pick any two versions below to diff them.
- Price
- $64.37 → $75.34(+17.0%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 29, 2026 → Jan 29, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices Brunswick for weak demand for new boats. Boats are large purchases, so high interest rates and weak consumer confidence reduce sales, mostly of lower priced boats. Brunswick said that conflict in Iran and economic uncertainty weighed on consumer sentiment in Q2 2026, and US retail boat sales were roughly flat in the first half after it cut some value models. Tariffs added about $40 million of costs in 2026. added: Brunswick still grows. In removed: Q2 added: Q3 2026, sales removed: still rose removed: 7.7% added: 6.9% to removed: $1.56 added: $1.45 billion, and adjusted EPS rose removed: 34.5% added: 62.9% to removed: $1.56, partly because of tariff refunds. added: $1.58, with growth in all segments for the fifth quarter in a row. For the gap to close, three things must be true. Retail demand for boats must recover in 2027, helped by lower rates. Dealer inventories must stay lean, so that engine and boat orders follow retail demand. Parts, accessories and Navico must keep their higher margins. The Q3 2026 report removed: on October 29, added: passed its test. The Q4 2026 removed: and added: report with the 2027 removed: outlook added: outlook, expected in removed: early 2027 give added: late January 2027, gives the removed: tests. added: next test. David Foulkes retires at the end of 2026, and Aine Denari becomes CEO on January 1, 2027. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a longer downturn in boat demand, because boats are a large purchase that buyers can delay.
- Risks
- Boat demand depends on consumer confidence and interest rates. A recession or higher rates can reduce retail sales, and dealers then order fewer boats and engines. Tariffs added about $40 million of costs in 2026. New tariffs or the end of refunds can lower margins. Debt was removed: $2.10 added: $2.00 billion at removed: June 30, added: October 3, 2026, and the debt-to-capitalization rate was removed: 55.6%. added: 54.2%. Lower cash flow in a downturn leaves less room for buybacks and debt repayment. A new CEO starts on January 1, 2027. A change in leadership can bring changes in strategy and costs.
- Balance sheet
- Cash: removed: $300M added: $279M Debt: removed: $2.1B added: $2.0B Net debt: removed: $1.8B added: $1.7B Debt due within 12 months: removed: $295M added: $195M Brunswick aims to keep an investment grade balance sheet, and its debt is moderate. At removed: June 30, added: October 3, 2026, added: the end of Q3 2026, short-term debt and current maturities were removed: $295.2 added: $195.1 million and long-term debt was $1.81 billion, so total debt was removed: $2.10 added: $2.00 billion. added: Brunswick paid $100.0 million of short-term debt in the first nine months of 2026. Cash and marketable securities were removed: $299.7 added: $279.4 million. The debt-to-capitalization rate was removed: 55.6%. added: 54.2%. Interest expense was removed: $49.4 added: $72.3 million in the first removed: half added: nine months of 2026, down from removed: $59.7 added: $86.7 million a year earlier. removed: Operating added: Free cash flow was removed: $251.5 added: $301.1 million in the first removed: half added: nine months of 2026, and Brunswick expects removed: free cash flow of $400 million or more for the year. It plans to retire removed: at least $160 million added: or more of debt in 2026. As of removed: Jun 30, added: Oct 3, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 earnings: boat demand. removed: Pending. added: Passed. Watch: Revenue within $1.4 to $1.5 billion and adjusted EPS within $1.20 to $1.40 with lean dealer inventories pass; results below the range or a cut in full-year guidance fail. added: Outcome: Net sales were $1.45 billion and adjusted EPS was $1.58, above the range, with lean boat and engine pipelines, and Brunswick raised its 2026 guidance to adjusted EPS of about $4.65. Jan 29, 2027 (estimate): Full-year 2026 report and 2027 outlook. Pending. Watch: A 2027 outlook with growth in sales and earnings under the new CEO passes; an outlook for lower sales or lower margins fails.
- Recent events
- Oct added: 29, 2026: Brunswick reported Q3 2026 results. Net sales rose 6.9% to $1.45 billion, and sales grew in all segments. GAAP diluted EPS was $1.01 and adjusted EPS was $1.58, up 62.9%. The adjusted operating margin rose 230 basis points to 10.1%. Brunswick raised its 2026 guidance to adjusted EPS of about $4.65, with net sales of $5.7 to $5.8 billion, free cash flow of $400 million or more and share buybacks of $80 million or more. Oct 8, 2026: Brunswick said it will release its Q3 2026 results before the market opens on October 29, 2026, and hold its call that day. Sep 21, 2026: Brunswick said that David Foulkes will retire as CEO and Chairman at the end of 2026. Aine Denari, President of Navico Group and Chief Technology Officer, becomes CEO on January 1, 2027. David Everitt, the Lead Independent Director, becomes Non-Executive Chairman. Jul 30, 2026: Brunswick reported Q2 2026 results. Net sales rose 7.7% to $1.56 billion, and sales grew in all segments. GAAP diluted EPS was $1.66 and adjusted EPS was $1.56. Brunswick raised its 2026 guidance to adjusted EPS of $4.35 to $4.75, with net sales of $5.7 to $5.8 billion and free cash flow of $400 million or more. Jul 30, 2026: Brunswick expects about $25 to $30 million of net IEEPA tariff refunds in 2026 and about $40 million of incremental tariffs. It plans to retire at least $160 million of debt in 2026.