Morgan Stanley Downgrades REV Group (REVG) to Underweight

Morgan Stanley analyst Angel Castillo downgraded REV Group (NYSE: REVG) from Equalweight to Underweight with a price target of $33.00 (from $34.00).

The analyst comments: "We see a divergence of drivers for REV Group amid macro uncertainty and the potential for economic softness to continue. First is REVG is somewhat shielded in its Specialty business given the vast majority of its F&E business is driven by municipality spending where budgets have already been locked in for 2025 and where the company currently has a multi-year backlog providing healthy visibility to demand. However, with that multi-year backlog comes locked in pricing (currently expecting +MSD% FY25 pricing growth within Specialty) that has potential to trail cost increases should input costs continue to rise. Second, we see the current macroeconomic uncertainty shifting the risk/reward skew of REVG's Recreational guide of flat revenue/margins more cautiously as this is clearly more consumer driven and therefore more susceptible to shortfalls in the event of economic weakness."

For an analyst ratings summary and ratings history on REV Group click here. For more ratings news on REV Group click here.

Shares of REV Group closed at $31.81 yesterday.

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