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Why Camping World Is Jumping 10% Today

By Rich Duprey – Updated Sep 9, 2020 at 12:06PM

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The RV dealer is making a habit out of rising by leaps and bounds.

What happened

Shares of Camping World Holdings (CWH -4.97%) were jumping 10% higher in morning trading Tuesday after a JPMorgan analyst upgraded the recreational vehicle dealer to overweight.

So what

Analyst Ryan Brinkman told investors in a note this morning that Camping World will benefit from "demand tailwinds" as consumers look to get away from populous areas to avoid contracting COVID-19. He also raised his price target to $40 per share from $30, a 33% increase from where the RV dealer closed on Friday.

An RV in the wilderness

Image source: Getty Images.

Now what

Brinkman said the sales momentum that began in the second quarter has definitely carried over into the third, indicating there may be a fear over additional COVID-19 outbreaks.

Camping World's stock has gone stratospheric since the pandemic was declared, rising almost 900% from its March low point. Analysts still forecast the RV dealer will grow earnings 36% annually for the next five years. And with the stock trading at a fraction of its sales and just four times the free cash flow it produces, there does seem to be upside remaining to the shares.

Last week, CEO Marcus Lemonis seemed to agree there was still a lot of money to be made on the stock as he made his 14th open market purchase in less than a month. He has made three more transactions since then.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Camping World Holdings. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Camping World Holdings, Inc. Stock Quote
Camping World Holdings, Inc.
CWH
$24.68 (-4.97%) $-1.29

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