PII changes
Pick any two versions below to diff them.
- Price
- $53.38 → $59.41(+11.3%)
- Next earnings
- Oct 27, 2026 → Jan 27, 2027
- Next earnings is estimate
- No → Yes
- About
- Polaris is the largest maker of powersports vehicles, based in Minnesota. It makes off-road vehicles (RANGER, RZR and Polaris XPEDITION), snowmobiles, the Slingshot, military and commercial vehicles, Bennington and other pontoon boats, and Aixam and Goupil small vehicles in Europe. It also sells parts, garments and accessories (PG&A), which give higher margins. Polaris makes money from the sale of these products to a network of independent dealers, which then sell them to consumers, often with financing. North America gave removed: 87% added: 89% of sales in removed: Q2 added: Q3 2026. In February 2026, Polaris sold a majority interest in its Indian Motorcycle business. Mike Speetzen is the CEO.
- Thesis
- The market prices Polaris as a debt-heavy maker of products that people buy only when they feel rich and credit is cheap. Powersports demand is weak, dealers use promotions, and the 10-year Treasury yield rose near 5% in September 2026, which makes vehicle loans more expensive. removed: The strong Q2 added: Part of the 2026 removed: result did added: profit does not removed: change this view. Of the $1.97 of added: repeat. Polaris raised its 2026 adjusted removed: EPS, $0.96 came added: EPS guidance to $3.50 to $3.60 in October 2026, but about $1.09 of this comes from removed: a one-time refund added: refunds of tariffs that the Supreme Court found illegal in February 2026. Other tariffs still raise costs. removed: Debt rose added: The Q3 2026 report gave the first evidence of a recovery. Sales grew 11%, off-road vehicle retail sales grew 2% without Youth models, and Polaris met the normal covenants after the relief period ended. It also cut the revolving loan to removed: $1.95 billion added: $149 million at removed: June added: September 30, 2026, removed: and the lenders' covenant relief, which allowed leverage up to 5.5 times, ended with the added: from $460 million at June removed: 2026 quarter. added: 30, 2026. For the gap to close, the business must earn more without the removed: refund, added: refunds, and the checks are clear. removed: Retail added: Off-road vehicle retail sales removed: of off-road vehicles must removed: stay added: keep growing in a flat removed: or grow, as management expects for the second half of 2026. added: industry. Polaris must reach its added: new 2026 guidance removed: of $7.30 billion to $7.50 billion in sales and removed: $3.00 to $3.10 of added: give 2027 guidance with growth in adjusted removed: EPS. added: EPS without tariff refunds. It must removed: meet added: stay within the normal covenants (leverage of 3.5 times or less) removed: from Q3 2026 and removed: pay down the $460 million revolving loan with second-half cash flow. added: keep its debt falling. Dealer inventory must stay healthy without deeper promotions. The removed: first added: next evidence comes with the removed: Q3 added: Q4 2026 report removed: on October 27, 2026, and the 2027 removed: guidance comes added: guidance, expected in late January 2027. Because demand depends on interest rates and consumer confidence, which Polaris does not control, the gap can close only slowly, over two to three years. A recession or higher rates would delay it.
- Risks
- Demand for off-road vehicles, snowmobiles and boats depends on consumer confidence and the cost of credit. The 10-year Treasury yield rose near 5% in September 2026. Promotions in the industry continue, and a recession could cut sales and margins fast. Debt was removed: $1.95 added: $1.63 billion at removed: June added: September 30, 2026, and debt was removed: 70% added: 66% of total capital. The covenant relief that allowed leverage up to 5.5 times ended with the June 2026 quarter, and the normal limit removed: is added: of 3.5 removed: times. Weak added: times now applies. Polaris was in compliance at September 30, 2026, but weak earnings could leave little room under the covenants and limit buybacks. Tariffs other than the IEEPA tariffs still apply and raise costs for parts that Polaris imports. removed: The $74 added: IEEPA tariff refunds and interest added $83.7 million removed: refund added: to results in removed: Q2 2026 is one-time, added: the first nine months of 2026, and removed: further added: Polaris collected substantially all refunds removed: of about $40 million are added: for the claims it submitted. This benefit does not removed: certain. added: repeat in 2027. Snowmobile sales depend on snow. A winter with little snow lowers retail sales and leaves dealers with more stock.
- Balance sheet
- Cash: $302M Debt: removed: $2.0B added: $1.6B Net debt: removed: $1.6B added: $1.3B Interest cover: removed: 1.7× added: 2.0× Undrawn credit line: removed: $940M, added: $1.2B, to December 2029 Debt due within 12 months: $35M Last debt due: 2031 Polaris funds itself with an unsecured credit facility and senior notes. At removed: June added: September 30, 2026, debt was $500 million of 6.95% notes due March 2029, $500 million of 5.60% notes due March 2031, a removed: $462.5 added: $456.3 million term loan and removed: $459.8 added: $149.2 million drawn on the $1.4 billion revolving loan facility, both due December 2029, and removed: $44 million of other items. Debt is the carrying value of all financing obligations. Borrowings removed: rose added: fell from removed: $1.54 billion added: $1,951 million at removed: December 31, 2025, mostly added: June 30, 2026, because Polaris removed: drew $425 million on the added: repaid most of its seasonal revolving loan added: draw in added: Q3 2026. Availability on the removed: first half, as it usually does for seasonal working capital. added: revolving loan facility was $1,241.6 million at September 30, 2026. Interest cover is GAAP operating income divided by interest expense for the first removed: half added: nine months of 2026; it is low because Q1 2026 had an operating loss. The added: covenant relief period ended on June 30, 2026. The covenants removed: again added: now require interest cover of at least 3.0 times and leverage of at most 3.5 times adjusted removed: EBITDA from Q3 2026, after a relief period that ended on June 30, 2026. added: EBITDA, and Polaris was in compliance at removed: June added: September 30, 2026. removed: During the relief period, the lenders limited buybacks, and added: Debt was 66% of total capital at that date. Polaris bought back no stock in the added: open market in the first removed: half added: nine months of removed: 2026. added: 2026, and $1.1 billion of buyback authority remained. It paid dividends of removed: $1.36 added: $2.04 per share in the first removed: half. added: nine months. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 27, 2026: Q3 2026 results: retail demand, margins and covenants. removed: Pending. added: Passed. Watch: Off-road vehicle retail sales flat or higher, 2026 guidance kept, and leverage within the normal 3.5 times covenant pass; lower retail sales, a guidance cut or a new covenant waiver fails. added: Outcome: Off-road vehicle retail sales grew 2% without Youth models, Polaris raised its 2026 adjusted EPS guidance to $3.50 to $3.60, and it met the normal covenants at September 30, 2026. Jan added: 27, 2027 (estimate): Full-year 2026 results and 2027 guidance. Pending. Watch: Adjusted EPS of removed: $3.00 added: $3.50 to removed: $3.10 added: $3.60 for 2026, removed: a smaller revolving loan balance added: lower debt at year end, and 2027 guidance with added: adjusted EPS growth without tariff refunds pass; lower 2027 guidance or higher debt fails.
- Recent events
- added: Oct 27, 2026: Polaris reported Q3 2026 sales of $2,043 million, up 11%, GAAP EPS of $0.66 and adjusted EPS of $1.08. Tariff refunds of $10 million added $0.13 to adjusted EPS. North America sales grew 14%, and Polaris gained off-road vehicle share for the sixth quarter in a row. Its off-road vehicle retail sales, without Youth models, grew 2%, while North America industry retail sales were flat. Adjusted results exclude $24.6 million of litigation-related expenses, mostly for pending class action settlements. Polaris raised its 2026 guidance for the third time, to adjusted sales of $7.55 billion to $7.60 billion and adjusted EPS of $3.50 to $3.60. About $1.09 of that EPS comes from tariff refunds. Sep 18, 2026: UBS cut its price target on Polaris to $61 from $67 and kept a Neutral rating. It pointed to continued promotions in powersports. The stock fell about 3% that afternoon. Jul 28, 2026: Polaris reported Q2 2026 sales of $2.02 billion, up 9%, and adjusted EPS of $1.97. A refund of $74 million of IEEPA tariffs added $0.96 to adjusted EPS. North America off-road vehicle retail sales grew 5%, ahead of the industry. Polaris raised its 2026 guidance to sales of $7.30 billion to $7.50 billion and adjusted EPS of $3.00 to $3.10, from $1.60 to $1.70. About $40 million of possible further tariff refunds is not in the guidance. The stock fell about 2% to 4% that day. Jun 22, 2026: Polaris appointed Dustin Semach, the CEO of Sealed Air, to its board, effective June 19, 2026. He joined the audit and compensation committees. Jun 15, 2026: Polaris paid a quarterly dividend of $0.68 per share, up from $0.67 a year earlier. Apr 30, 2026: At the annual meeting, shareholders elected the Class II directors and approved 4.58 million more shares for the company's equity incentive plan. Apr 28, 2026: Polaris reported Q1 2026 sales of $1.66 billion, up 8%, a GAAP loss of $0.83 per share and adjusted EPS of $0.13. It kept its 2026 guidance of $7.15 billion to $7.30 billion in sales and $1.60 to $1.70 of adjusted EPS. On February 2, 2026, it had completed the sale of a majority interest in Indian Motorcycle.