Camping World Holdings (NYSE:CWH) received an upgrade from Neutral to Buy by DA Davidson, which set a price target of $36.00 (previously $25.00). Shares gained more than 5% intra-day today.
The analysts explained their decision, stating that the company has expressed its ongoing commitment to being a growth-oriented company while adopting a more disciplined approach to SG&A (Selling, General, and Administrative) and CapEx (Capital Expenditures). This strategy allows them to aggressively pursue value-enhancing RV acquisitions. With the RV industry returning to a state of normalcy in the past 6-12 months, the company has expedited its acquisition efforts, which the analysts believe to be successful.
Feedback from smaller dealers indicates that competing with larger dealership chains on pricing for new/used RVs and used inventory procurement has become increasingly challenging.
The analysts also believe that the company’s proactive acquisition strategy will augment its scale and bargaining power with original equipment manufacturers (OEMs) in the future, as these acquisitions contribute to a greater share of the overall RV industry retail market.