Brunswick Corp., the parent company of brands like Sea Ray and Boston Whaler, is focusing on advanced navigation technology and autonomous docking to address declining boat sales. With retail sales of new vessels projected to remain low through 2026, Brunswick aims to attract buyers by simplifying boat maneuvering in crowded marinas.
The company is also increasing its aftermarket and recurring revenue through technology and software sales, which currently account for about 60% of its earnings. Analyst Scott Stember from Roth Capital Partners notes that Brunswick's strategy allows it to maintain exposure beyond just new boat sales.
The company anticipates annual sales of 145,000 to 160,000 units by 2030, a modest recovery from this year's estimated sales of fewer than 135,000 vessels. CEO David Foulkes highlighted that while premium boats are performing well, lower-priced models are struggling due to interest rate pressures.
Brunswick's Navico Group has seen a 55% increase in technology content among its original-equipment customers since 2023, and has launched over 30 new products, including the Simrad AutoCaptain, which aids in navigation and docking.
Additionally, the Freedom Boat Club, which offers members access to boats at various locations, has tripled its membership since 2019, contributing to a recurring revenue model that is increasingly vital as new boat sales decline. Brunswick is targeting $7 billion to $8 billion in revenue by 2030, with operating margins of 10% to 13% and earnings between $8 and $12 per share.
KeyBanc maintains a sector-weight rating on Brunswick, while Roth has a buy rating with a $94 price target, citing the company's unique position in the recreation and leisure sector. Brunswick is also working to reduce supply chain risks by cutting its reliance on China-sourced parts by 75% and lowering tariff exposure by 70%, which could provide a competitive edge.
Investors will be watching closely to see if Brunswick's focus on technology and recurring revenue can sustain profits amid challenging unit growth