Financial services firm D.A. Davidson has expressed optimism regarding the recreational vehicle (RV) chassis industry, citing significant increases in orders and production as indicators of a potential market upswing.
An analysis of February’s industry data revealed that orders for Class 5-7 chassis—which encompass many Class A and C motorhomes—surged by 40% year-over-year, with production doubling during the same period.
This trend suggests a robust upward trajectory as the industry approaches the spring season, an Investing.com report notes.
D.A. Davidson in its analysis also highlights REV Group, Inc. (NYSE: REVG) as a key player poised to benefit from these favorable trends.
The company, with a market capitalization of $1.56 billion and a price-to-earnings ratio of 16.93, has demonstrated strong financial performance, achieving a 63% return over the past year.
The firm has assigned a “BUY” rating to REV Group, noting the company’s recent optimistic outlook on its RV business. However, D.A. Davidson advises monitoring retail activity before adopting a more bullish stance.
Similarly, Shyft Group (NASDAQ: SHYF), another industry participant with a “BUY” rating, is expected to gain from these positive developments.
Although Shyft Group’s RV business is smaller in scale compared to REV Group, it remains well-positioned to capitalize on favorable industry trends.
The notable increase in RV chassis orders and production signals a recovery and growth within the RV market. This trend could have significant implications for companies like REV Group and Shyft Group, which are well-positioned to meet the increasing demand for RVs.
D.A. Davidson’s analysis underscores the potential for a robust growth period in the RV chassis sector.
As the industry rebounds from previous lows, the significant uptick in production and orders may herald a prosperous season ahead for key manufacturers.