Winnebago Stock Stalls Despite Q3 Beat

There is ample optimism surrounding WGO

Deputy Editor
Jun 24, 2020 at 10:21 AM
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Winnebago Industries, Inc. (NYSE:WGO) stepped up to the earnings plate this morning, reporting fiscal third-quarter losses and revenue that beat Wall Street's estimates. The recreational vehicle manufacturer announced that this most recent quarter was "uniquely challenging" due to coronavirus-related closures, but it will continue to remain focused on targeted synergies and expanding the market shares of its recently acquired Newmar going forward.  Despite this, the shares of WGO are down 4.3% to trade at $67.83.

Since its four-year low of $16.94 in mid-March, WGO are up over 300%, grabbing a fresh record high yesterday. Additionally, yesterday's close saw Winnebago stock break above the resistant $70 level for the first time ever. Meanwhile, over the last three months, the equity's ascending 20-day moving average has acted as a level of support, pushing the equity 129.5% higher during this time period and capturing some of today's losses. 

The preference for calls is strong in the options pits. WGO sports a 50-day call/put volume ratio of 2.49 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 76th percentile of its annual range, and implies a healthier-than-usual appetite for long calls of late.

A look at today's options trading shows that so far today, 2,872 calls and 397 puts have crossed the tape -- a staggering 12 times the intraday average. The two contracts leading the charge are the monthly August 80 and 90 calls, and new positions are being opened at each. 

Analysts are mostly optimistic about Winnebago stock. Of the seven in coverage, all but two rate it a "strong buy." Meanwhile, the 12-month consensus price target of $56.88 is a 17.9% discount to current levels, leaving plenty of room for price-target hikes .


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