Wunderlich: Buy Malibu Boats, It's A Leading Player In 'Rebounding Segment'

In a report published Wednesday, Wunderlich analyst Rommel Dionisio initiated coverage of

with a Buy rating and a price target of $27. Malibu is a leading producer of recreational boats and is poised for robust growth, driven by its market share gains and new product launches. The company's strength lies in its strong position in the fast growing PSB segment. The company's trailing three-year unit sales CAGR of 13.4 percent well exceeds that of the overall recreational boat sector of 6.2 percent. "In addition, despite this strong rebound, last year's level of total PSB units sold of 7,100 remains just over half the peak level of 13,100 seen in 2006, so we believe there still remains considerable room for the PSB category to recover further over the next several years," analyst Rommel Dionsio wrote. In the report Wunderlich noted, "With rising consumer sentiment, low interest rates, an improving environment for consumer credit availability, and lower fuel prices, the overall recreational boat market appears well positioned to continue seeing healthy growth over the next several quarters." Malibu is expected to launch four new modes in September which should help the company expand its market share further. "With MBUU currently trading at an approximate 15%-20% discount relative to its peer group, we believe the stock is attractively valued," Dionsio added.