Freedom initiates on snowplow maker Douglas with 'buy,' TP implying 20% upside
Freedom Broker recommends clients buy shares of Douglas Dynamics, a small manufacturer of snow-clearing equipment whose stock is up more than 30% year to date. The target price set for Douglas securities is 20% above current quotes. Sustainable growth is supported by well-known brands, a wide dealer network, and a balanced sales structure, analysts say.
Details
Freedom Broker has initiated coverage of Douglas Dynamics stock with a “buy” and $38 per share target price (according to a note seen by Oninvest). At the close yesterday, October 28, the stock was quoted at $31.62 per share, meaning Freedom’s target implies 20% upside.
Freedom's rationale
Douglas Dynamics, capitalized at $720 million, manufactures truck attachments for snow and ice clearing. It is the market leader in North America, with the industry’s broadest distribution network across the U.S. and Canada’s “snow belt,” Freedom writes.
The company’s second segment, Work Truck Solutions (WTS), provides customized upfitting of truck cabs and chassis. This diversifies the business away from weather-dependent demand and creates a more stable revenue base, Freedom notes. In the second quarter, WTS helped keep total revenue nearly flat year over year at $194.3 million, the company reported.
Freedom flags two main risks. First, unpredictable weather, which also affects supply chains. Second, volatility in raw material prices, primarily steel. Steel futures are up 24.3% year to date at $880 a ton, according to MarketWatch.
Stock performance
Year to date, Douglas Dynamics shares are up nearly 34%. Over the same period, the S&P 500, the broad U.S. equity benchmark, is up 17.9%.
Wall Street has two “buy” ratings and one “hold” on the stock, according to MarketWatch. The average target price is $37.75 per share, implying 19% upside to current levels.
The AI translation of this story was reviewed by a human editor.
