BRP Inc (DOO) Stock Forecast & Price Target

BRP is supported by resilient retail demand, especially in utility ORV, strong premium-model share gains, and a customer base skewing toward high-income households with average income of about $176K, which helps sustain pricing power and mix quality. Despite tariffs cutting gross margin by 740bp y/y, management showed it can offset pressure through operating leverage, pricing, manufacturing efficiencies, lean initiatives, and volume growth, while Q1 revenue of $2,392 million and normalized EBITDA of $334.4 million both beat consensus. The company’s balance sheet and cash generation also look strong, with leverage at 1.4x, expected FCF above $600 million to above $800 million, and active buybacks, while dealer expansion and international growth support longer-term earnings momentum.

BRP is facing a deteriorating earnings outlook as revised F27 guidance cuts Adjusted EBITDA to $925-$975MM from $1,175-$1,275MM and Normalized Diluted EPS to $3.00-$3.50 from $5.50-$6.50, reflecting a heavy tariff hit of about $500-$550MM and only about $200MM of mitigation actions. The company also expects commodity inflation to widen to a 100-125bp drag, while FQ2 2027 EPS of roughly -$0.68 to -$0.73 underscores how tariffs and shipment timing can sharply pressure profitability. Beyond near-term margin compression, demand remains cyclical and concentrated in North America at about 72% of revenue, so a weak economy, weather risk, and a dual-share structure controlling about 88% of voting rights all argue for a discounted valuation.