WINNEBAGO WGO CFA Institute Research Challenge Des Moines

WINNEBAGO (WGO) CFA Institute Research Challenge Des Moines, Iowa 19 February 2016

BUSINESS SUMMARY • Headquartered in Forest City, Iowa, USA • Established in the mid-20 th Century • Main operations: manufacturer of recreational vehicles (RVs) and related accessories

INDUSTRY OVERVIEW Durable Good Recouped well, currently healthy RV Negative growth rates during recession Cyclical with economy

COMPETITIVE POSITIONING • Main competitor: Thor Industries • Balanced in Motorhomes PRODUCT REVENUES WGO THO $ 3 500 000, 00 Significant struggle in Towable market sales: Ø WGO: $71, 684 Ø THO: $ 3, 096, 405. 00 $ 3 000, 00 $ 2 500 000, 00 Revenue • $ 2 000, 00 $ 1 500 000, 00 $ 1 000, 00 $ 500 000, 00 $Towables Motorhomes Products

INVESTMENT RISKS Low Fuel Prices Healthy Mindset Systematic Risk - Luxury Good Competition Babyboomers Finding + Retaining skilled workers Large Dealer Org

VALUATION & FINANCIAL ANALYSIS • • Risk Consideration Conservative Assumptions DDM DCF Relative

MODEL ASSUMPTIONS

DDM: TWO-STAGE DIVIDEND GROWTH MODEL • 10 -year high growth at 11% • 7% constant growth • Rate of Return 12. 82%

DCF: TWO-STAGE CASH FLOW TO THE FIRM MODEL • 5 -year high growth at 11% • Discounted by WACC 12. 71% • 7% constant growth

RELATIVE VALUATION MODEL

CONCLUSION Healthy current market share Plans of expansion WGO Favors demographics of USA Target: $18. 00 USD HOLD *This report is published for educational purposes only by students attending the CFA Institute Research Challenge.

WORKS CITED