Claude Jordan is the CEO of Arctic Cat.
Kyndell Harkness, Dml - Star Tribune
What analysts are saying: Market bites Arctic Cat
- May 19, 2012 - 4:43 PM
Arctic Cat released annual earnings on Tuesday with a lot to like about the results for the Plymouth-based maker of snowmobiles and ATVs. Sales were up 26 percent for the year and earnings even more so. But the stock traded down sharply during the day because investors were looking for better guidance for next year's sales than the company disclosed. Shares fell as much as 15 percent during the day, which left some analysts scratching their heads.
Mark Smith an analyst with Feltl & Co. in Minneapolis told the Star Tribune: "There's not a whole lot of room for complaining. You'd be hard-pressed to find many companies that are growing earnings per share at 40 percent after a year in which they grew 146 percent."
In his research report Smith did downgrade Arctic Cat from Strong Buy to Buy but is recommending investors "opportunistically buy" ACAT shares on the stock's pullback. "Investors may be disappointed by management's guidance," wrote Smith. "We think it's important to realize that the guidance may prove conservative." Shares closed Friday at $34.71.
TGT AND INVENTORIES
Target Corp. released stronger-than-expected first-quarter sales on Wednesday. The Minneapolis-based discount retailer had $16.9 billion in sales, up 5.8 percent. Some industry experts speculated that warm weather caused some customers to purchase more in the first quarter than they would have.
Daniel Binder, an analyst with Jeffries & Co., wonders if the strong numbers drew down inventories. "We suspect the surprise in [strong first-quarter] sales explains lower inventory, and we look for assurances from management that this will not limit second-quarter [sales] potential," Binder wrote.
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