Recreational vehicle company Winnebago Industries (WGO) “is in good shape for the recession” as it benefits from two key tailwinds amid the coronavirus pandemic, says one analyst.
For starters, people are avoiding planes these days, but they still want to travel and be outdoors.
RV demand is “booming in the U.S. due to COVID-19’s impact on air travel, leading many Americans to use an RV vacation as a substitute,” Morningstar analyst David Whiston wrote in a note to investors.
Additionally, campers are skewing on the younger side. “Millennial and Gen X campers are 81% of new U.S. campers, so Winnebago has plenty of runway with younger consumers if it executes right,” wrote Whiston.
“We think Winnebago’s brand equity gives it a good shot at capitalizing on these trends,” he added.
Winnebego and its main competitors, Thor (THO) and Forest River, currently hold 80% of the North American motor home market.