Polaris (0KJQ) AI Stock Analysis

Company Guidance

Polaris raised full year sales guidance to $7.55 billion to $7.6 billion, representing growth of approximately 6% and approximately 11% organic sales growth at the midpoint excluding the sale of Indian Motorcycle; fourth quarter organic sales are expected to be roughly flat, with Q4 retail expected to be flattish. Full year adjusted EBITDA margin is expected to increase 270 to 275 basis points, or approximately 165 to 170 basis points on an operational basis excluding tariff refunds, versus prior outlook of 145 to 170 basis points, with commodity and logistics costs expected to be $70 million higher than last year; fourth quarter adjusted EBITDA is expected to increase by more than 100 basis points. Full year adjusted EPS guidance increased to $3.50 to $3.60, including $1.90 from tariff refunds, while operational adjusted EPS is expected to be $2.40 to $2.50, and fourth quarter adjusted EPS is expected to be $0.32 to $0.42. Tariffs are expected to be $215 million this year, the Indian Motorcycle separation remains on track to be accretive by $50 million to adjusted EBITDA, year end working capital is expected to be negative 2% of sales, and net leverage is expected to be below 2x. Retail, previously expected to be flat year over year, is now expected to grow low single digits. No formal 2027 guidance was provided, but the company intends to manage net leverage within its 1x to 2x target range, expects manufacturing facilities to run at roughly 70% of capacity, expects 9% of material cost of goods sold originating from China by year end versus approximately 14% at the beginning of the year, and targets below 5% by year end 2027.