Raymond James says BRP tariff impact delayed, set to ramp in Q2

Raymond James says the firm caught up with Strong Buy-rated BRP regarding the impact from the amended Section 232 tariffs. Interestingly, their view is that the intention of the amendment was not necessarily to raise tariffs meaningfully but instead to simplify things for customs officers – rather than trying to figure out the metal content and multiplying that by a spot price, the tariff applied to the import value, the firm explained. The good news is that this does not apply to PWC or 3WV, only snowmobiles and ORVs. Also, there is some inventory in the U.S. to draw down, so the impact won’t really be felt until Q2, which implies the estimated impact of C$500M is essentially a nine-month number and thus higher on an annualized basis, adds Raymond. The firm notes that a meaningful and broad price increase shouldn’t be expected just yet, as the analysis will likely be SKU by SKU.