Brunswick (BC) AI Stock Analysis

• Market Cap: $2.92B
• Dividend Yield: 3.82%
• Average Volume (3M): 1.20M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 1.12
• Revenue Growth: -18.19%
• EPS Growth: -68.10%
• Country: US
• Employees: 14,250
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Auto - Recreational Vehicles
• EPS (TTM): 1.90
• Shares Outstanding: 65,907,340
• 10 Day Avg. Volume: 1,760,694
• 30 Day Avg. Volume: 1,195,298
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.71
• Price to Cash Flow (P/CF): 3.00
• P/FCF Ratio: 3.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $68.92
• Price Target Upside: 54.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Brunswick's overall stock score reflects solid cash flow and market share gains, offset by concerns over declining revenues, high leverage, and a bearish technical outlook. While the company has strategic initiatives in place to address these challenges, its current valuation and technical indicators suggest cautious optimism.

Positive Factors

Financial Performance

BC generated $284M in FCFE and repurchased $200M (~4% of market cap) in FY24, reinforcing its strong cash generating model.

Innovation and Market Share

BC continues to innovate and gain share through the downcycle, outperforming in premium segments and outboard engines.

Negative Factors

Inventory and Production

Dealers could remain cautious with inventory replenishment due to elevated inventory levels and required promotional activity, potentially impacting wholesale order patterns adversely.

Sales and Earnings Decline

Despite a soft year-end, BC navigated an -18% sales decline to $5.2B and a -48% drop in adj. EPS to $4.57 as industry volumes declined sharply.

Stock Rating and Valuation

The company is downgraded from Buy to Neutral due to concerns about slower industry recovery and delayed demand from payment buyers.

Brunswick Business Overview & Revenue Model

Company Description

Brunswick Corporation designs, manufactures, and markets recreation products worldwide. It operates through Propulsion; Parts & Accessories; and Boat segments. The Propulsion segment provides outboard, sterndrive, and inboard engines for independent boat builders and governments through marine dealers and distributors, specialty marine retailers, and marine service centers; and propulsion-related controls, rigging, and propellers to original equipment manufacturers and aftermarket retailers, distributors, and distribution businesses. This segment offers its products under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, and Mercury Diesel brands. The Parts & Accessories segment provides engine parts and consumables, electrical products, boat parts and systems, engine oils and lubricants, marine electronics and control systems, instruments, trolling motors, fuel systems, and electrical systems, as well as specialty vehicle, mobile, and transportation aftermarket products for aftermarket retailers, distributors, and distribution businesses, as well for as for the original equipment manufacturers in marine and non-marine markets; and supplies parts and accessories. This segment offers its products under the under the Mercury, Mercury Precision Parts, Quicksilver, and Seachoice brands. The Boat segment provides Sea Ray sport boats and cruisers; Bayliner sport cruisers, runabouts and Heyday wake; Boston Whaler fiberglass offshore boats; Lund fiberglass fishing boats; Crestliner, Cypress Cay, Harris, Lowe, Lund, Princecraft aluminum fishing, utility, pontoon, and deck boats; and Thunder Jet heavy-gauge aluminum boats, as well as the freedom boat club, dealer services, and technology to the marine industry through dealers and distributors. Brunswick Corporation was founded in 1845 and is headquartered in Mettawa, Illinois.

How the Company Makes Money

Brunswick Corporation generates revenue through its diversified portfolio across three main segments. The Propulsion segment is the largest revenue generator, primarily selling marine engines under well-known brands such as Mercury and MerCruiser. This segment benefits from both direct sales to boat manufacturers and aftermarket sales to boat owners. The Parts & Accessories segment contributes to revenue through the sale of marine-related products like electronics, engine parts, and maintenance supplies, often through distribution networks and retail channels. The Boat segment adds to the revenue stream by selling boats under various brands, including Bayliner, Boston Whaler, and Sea Ray. Brunswick's earnings are further bolstered by strategic partnerships and a strong dealer network that enhances market reach and customer engagement, as well as a focus on expanding its presence in international markets.

Brunswick Financial Statement Overview

Summary

Brunswick's financial performance shows strong operational efficiency and robust cash flow generation, with a solid cash flow score of 80. However, challenges are present in terms of declining revenue and increased leverage, which are reflected in the income statement and balance sheet scores of 75 and 65, respectively. Addressing these issues is crucial for sustaining growth and financial stability.

Income Statement

Brunswick displays a solid profitability profile with a Gross Profit Margin consistently above 20% over the years. The Net Profit Margin has shown signs of volatility, peaking at 10.9% in 2022, but has declined to 2.8% in 2024, indicating some profitability challenges. The Revenue Growth Rate is concerning, with a decline of -18.17% from 2023 to 2024, suggesting potential demand issues or market pressures. Despite this, the company maintains a healthy EBIT and EBITDA Margin, reflecting strong operational efficiency.

Balance Sheet

The balance sheet reveals a high Debt-to-Equity Ratio of 1.24 in 2023, indicating substantial leverage which could pose risks in economic downturns. However, the Return on Equity improved significantly to 20.1% in 2023, showcasing effective use of equity to generate profits. The Equity Ratio stands at approximately 33.5% in 2023, suggesting a moderate equity buffer against liabilities, but declining equity levels in 2024 could indicate future financial constraints.

Cash Flow

Brunswick shows robust cash flow management with a Free Cash Flow to Net Income Ratio consistently above 1, indicating effective cash generation from operations. The Operating Cash Flow to Net Income Ratio has been strong, especially in 2023 with a ratio of 1.74. Despite a decline in Free Cash Flow in 2024, the company has demonstrated an ability to maintain positive cash flows over the years, essential for sustaining operations and growth initiatives.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.24B	6.40B	6.81B	5.85B	4.35B
	Gross Profit
1.35B	1.83B	1.95B	1.67B	1.21B
	EBIT
311.60M	734.90M	947.80M	812.90M	539.30M
	EBITDA
618.70M	1.01B	1.18B	980.50M	693.50M
	Net Income Common Stockholders
149.30M	420.40M	677.00M	593.30M	372.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
269.80M	468.60M	600.10M	355.30M	576.30M
	Total Assets
5.68B	6.23B	6.32B	5.42B	3.77B
	Total Debt
201.10M	2.59B	2.51B	1.82B	951.40M
	Net Debt
-55.40M	2.12B	1.91B	1.46B	431.80M
	Total Liabilities
3.79B	4.14B	4.28B	3.51B	2.26B
	Stockholders Equity
200.00M	2.09B	2.04B	1.91B	1.51B
Cash Flow		Free Cash Flow
264.00M	444.30M	197.80M	306.90M	615.90M
	Operating Cash Flow
431.40M	733.60M	586.10M	574.00M	798.30M
	Investing Cash Flow
-168.90M	-378.90M	-443.20M	-1.35B	-246.90M
	Financing Cash Flow
-442.70M	-487.00M	110.80M	621.80M	-361.80M

Brunswick Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 44.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BC, the sentiment is Negative. The current price of 44.71 is below the 20-day moving average (MA) of 51.66, below the 50-day MA of 57.75, and below the 200-day MA of 71.11, indicating a bearish trend. The MACD of -4.03 indicates Positive momentum. The RSI at 34.24 is Neutral, neither overbought nor oversold. The STOCH value of 23.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BC.

Brunswick Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	71 Outperform	$2.28B	14.39	41.18%	2.34%	4.13%	56.76%
CHEF	71 Outperform	$2.18B	40.99	11.18%	―	10.50%	59.18%
SON	68 Neutral	$4.28B	26.27	6.42%	4.79%	-6.93%	-65.66%
WEN	64 Neutral	$2.51B	13.53	68.30%	7.82%	2.98%	-2.58%
BC	64 Neutral	$2.92B	22.92	7.50%	3.82%	-18.19%	-68.10%
THO	62 Neutral	$3.67B	18.30	5.13%	2.84%	-8.45%	-25.41%
Sector *	59 Neutral	$11.53B	10.43	-0.21%	4.02%	1.19%	-15.83%