Brunswick Corporation (BC – Free Report) is likely to benefit from a focus on recurring revenue streams, innovative product launches and investments in digital assets. Also, focus on the Mercury Marine division bodes well. However, cautious dealer ordering and elevated discounting are a concern.
Growth Drivers for BC Stock
One of Brunswick’s key strengths lies in its robust recurring revenue channels, which include Freedom Boat Club, engine parts and accessories and aftermarket sales. These streams contributed nearly 70% of its adjusted operating earnings in the third quarter of 2024, providing a stable financial foundation amid market fluctuations.
Brunswick’s Mercury Marine division continues to dominate, gaining 50% U.S. outboard engine market share in the third quarter of 2024. This leadership is bolstered by Brunswick’s commitment to innovation, with over 20 new products launched in 2024, including state-of-the-art fishfinders and stabilization systems.
The company is expanding Freedom Boat Club’s presence, completing the acquisition of a major Florida franchise and planning entry into the Asia market. These initiatives are expected to bolster recurring revenue streams and support long-term growth.
Additionally, its investments in digital assets and customer engagement strategies are driving steady lead generation and conversion, setting the stage for growth when market conditions stabilize.
Brunswick’s Concerns
Image Source: Zacks Investment Research
The marine market remains challenging, with U.S. outboard engine retail units down 10% year over year in the third quarter. Elevated discounting and cautious dealer sentiment have impacted wholesale orders and production levels. Shares of Brunswick have declined 8.4% in the past six months against the industry’s 27.8% growth.
Our Take on BC Stock
Brunswick’s ability to deliver results amid a difficult environment, combined with its leadership in market share, innovative product launches and strong financial management, makes it a stock worth holding. While near-term pressures in the marine market persist, Brunswick’s strategic positioning and focus on recurring revenue channels provide a solid foundation for future growth. Investors with a forward-looking approach may find retaining Brunswick stock a prudent decision, with significant upside potential as the industry recovers and stabilizes.
BC’s Zacks Rank & Stocks to Consider
Brunswick currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
Norwegian Cruise Line Holdings Ltd. (NCLH – Free Report) currently sports a Zacks Rank #1 (Strong Buy). NCLH delivered a trailing four-quarter earnings surprise of 4.2%, on average. The stock has surged 46.9% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for NCLH’s 2025 sales and earnings per share (EPS) indicates growth of 8.3% and 25%, respectively, from the year-ago levels.
The Marcus Corporation (MCS – Free Report) currently sports a Zacks Rank #1. MCS has a trailing four-quarter earnings surprise of negative 131.6%, on average. The stock has surged 89.6% in the past six months.
The Zacks Consensus Estimate for MCS’ 2025 sales and EPS indicates growth of 6.6% and 334.8%, respectively, from the year-ago levels.
Royal Caribbean Cruises Ltd. (RCL – Free Report) currently carries a Zacks Rank #2 (Buy). RCL delivered a trailing four-quarter earnings surprise of 16.2%, on average. The stock has surged 92.5% in the past year.
The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates growth of 9.5% and 23.8%, respectively, from the year-ago levels.
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