What Happened?

Shares of off-Road and powersports vehicle corporation Polaris (NYSE: PII) jumped 3% in the afternoon session after an analyst at Roth Capital raised the firm's price target on the stock, citing a less concerning trade tariff situation. 

Roth Capital increased its price target on Polaris to $41 from a previous $32, while it maintained a Neutral rating on the shares. The analyst noted that while the outlook for the boat and off-road vehicle markets appeared weak for 2025, the trade tariff environment had become less of a concern recently. This news came ahead of the company's scheduled second-quarter earnings release on July 29. Investors had been watching the potential impact of tariffs, which the company previously estimated could have a net impact of less than $225 million for the year after mitigation efforts.

After the initial pop the shares cooled down to $53.33, up 2.5% from previous close.

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What Is The Market Telling Us

Polaris’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 11.2% on the news that the company reported weak third-quarter earnings results that fell below analysts' EPS and revenue estimates. 

Management called out a challenging consumer confidence and retail environment. Moving on, guidance reflected the weak trends observed by the business. FY'2024 sales are expected to decline approximately 20 percent year on year (vs. the previous guidance for a 17 to 20 percent y/y decline). Similarly, adjusted diluted EPS is expected to fall approximately 65 percent year on year (versus the prior outlook of a 56 to 62 percent decline). Overall, this was a softer quarter.

Polaris is down 5.4% since the beginning of the year, and at $53.33 per share, it is trading 38.6% below its 52-week high of $86.86 from August 2024. Investors who bought $1,000 worth of Polaris’s shares 5 years ago would now be looking at an investment worth $555.12.

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