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Thor Industries (THO) Earnings Preview

by | Jun 6, 2021

Thor Industries (THO) reporting earnings on Tuesday 6/8 before the open with the Street looking for $2.27 on $3.01B. Next quarter is guided to $2.79 and $3.11B while the FY is $9.32 and $11.39B, a 39.4% increase Y/Y. Shares have closed higher in three of the last four and five of the last eight. The average closing move has been 4.65% and the max move of 26.8%. The current implied move is 6.08%. Shares traded well from October to March before rolling over and now basing at the 50% retracement of the move at $115.50. A move back above the 8- and 21-MA at 126.50 has room back to $137. A small gap below measures back to $107.50. Options flow has been quiet lately with a lot of positions closed. One notable trade was on 5/25 when a trader sold the June $105 puts to buy the $120/$135 call spread 2,250X. The $6.5B company trades 11.8X earnings, 0.7X sales, and 35X cash with a 1.4% yield. THO has sustained strong sales trends over the last year as the pandemic has shifted a lot of discretionary spending towards outdoor activities. They are also seeing strength in Europe with new registrations up 44% in Q4. RVIA has revised their shipments forecast for 2021 to 24% growth with total RV shipments now up 23%. Hedge fund ownership fell 20%. Analysts have an average target for shares of $136.50 with a Street High $160 from BMO Capital. The firm positive in March noting that while its supply chain headwinds and declining market share were issues again, these issues can be overlooked amid ongoing robust retail trends. They expect a strong Q3 amid continued influx of first-time buyers and higher levels of engagement with outdoor lifestyle activities. Truist positive as well citing historically-lean dealer stocking levels and Northcoast similar in April noting “dealers we spoke with indicated ~60%-70% of their orders over the next 3 months were pre-sold, giving us confidence the inventory replenishment cycle for RV OEMs and suppliers is likely to last well into 2022.”

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