Brunswick’s Hold Rating: Balancing Modest EPS Gains with Declining Margins and Uncertain Demand

In a report released today, Stephen Grambling from Morgan Stanley maintained a Hold rating on Brunswick, with a price target of $51.00.

Stephen Grambling has given his Hold rating due to a combination of factors that influence Brunswick’s current financial outlook. Despite anticipating a modest earnings per share beat for the second quarter, driven by slightly better revenue and cost control, the company faces challenges such as declining gross margins and weaker retail trends. The management’s conservative guidance reflects these concerns, as they have incorporated a significant year-over-year deterioration in trends.
Looking ahead, Grambling notes that while the reduction in China tariffs is a positive development, potentially alleviating some financial pressure, the overall demand environment remains uncertain. The company’s forward guidance for 2025 is slightly below the midpoint of its prior range, indicating cautious optimism. Additionally, although Brunswick’s stock has recently outperformed the market, sustained growth may depend on stronger retail demand, which remains a key area of concern.

Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of BC in relation to earlier this year.