What happened

Shares of MarineMax (NYSE:HZO) are slipping today after the retailer of recreational boats and yachts was downgraded by Raymond James. The stock was down 10.9% as of 11:19 a.m. EDT on the news.

So what 

Raymond James analyst Joseph Altobello lowered his rating two steps from strong buy to market perform, noting that already weak trends in the boat market were getting worse given that registrations fell 14% in June, a seasonally important month for purchases. Year-to-date boat registrations are down 6%, leading him to believe that the buying cycle has peaked, and he said that slowing demand could be the start of a "vicious cycle."

Boats lined up in a marina

Image source: Getty Images.

Altobello also lowered his ratings from strong buy to market perform on MarineMax peers Malibu Boats (NASDAQ:MBUU) and MCBC Holdings (NASDAQ:MCFT), owner of luxury boat maker MasterCraft.

Now what

The downgrade comes just days before MarineMax is set to report third-quarter earnings, as the update is due out on Thursday. 

Analysts are expecting revenue growth of 11.7% to $403.5 million and for earnings per share to rise from $0.75 to $0.89 for the third quarter. In its second-quarter earnings report, the company slashed its full-year earnings guidance from $1.85-$1.95 to $1.75-$1.85, as it has been offering discounts in order to gain market share, which has boosted top-line growth but affected profitability. 

After today's drop, the stock is down 20% year to date, but looks cheap at a P/E of just 8.1 based on this year's guidance. The stock could see a big move one way or the other on Thursday after the company reports earnings, as the spring quarter is its most important of the year.