DA Davidson Sees Positive Outlook for RV Chassis Industry

Financial services firm D.A. Davidson has expressed optimism regarding the recreational vehicle (RV) chassis industry, citing significant increases in orders and production as indicators of a potential market upswing. ​

An analysis of February’s industry data revealed that orders for Class 5-7 chassis—which encompass many Class A and C motorhomes—surged by 40% year-over-year, with production doubling during the same period. 

This trend suggests a robust upward trajectory as the industry approaches the spring season, an Investing.com ​report notes.

D.A. Davidson in its analysis also highlights REV Group, Inc. (NYSE: REVG) as a key player poised to benefit from these favorable trends. 

The company, with a market capitalization of $1.56 billion and a price-to-earnings ratio of 16.93, has demonstrated strong financial performance, achieving a 63% return over the past year. 

The firm has assigned a “BUY” rating to REV Group, noting the company’s recent optimistic outlook on its RV business. However, D.A. Davidson advises monitoring retail activity before adopting a more bullish stance. ​

Similarly, Shyft Group (NASDAQ: SHYF), another industry participant with a “BUY” rating, is expected to gain from these positive developments. 

Although Shyft Group’s RV business is smaller in scale compared to REV Group, it remains well-positioned to capitalize on favorable industry trends. 

The notable increase in RV chassis orders and production signals a recovery and growth within the RV market. This trend could have significant implications for companies like REV Group and Shyft Group, which are well-positioned to meet the increasing demand for RVs. ​

D.A. Davidson’s analysis underscores the potential for a robust growth period in the RV chassis sector. 

As the industry rebounds from previous lows, the significant uptick in production and orders may herald a prosperous season ahead for key manufacturers. ​