Polaris Industries initiated with "neutral"

12/12/03 - Merrill Lynch

NEW YORK, December 12 (New Ratings) – Analysts at Merrill Lynch initiate coverage of Polaris Industries (PII) with a "neutral" rating.

Shares of Polaris Industries, a manufacturer of snowmobiles, all terrain vehicles, motorcycles and personal watercrafts, are currently trading at $90.79.

According to AG Edwards' research note published this morning, Polaris Industries offers a diversified basket of products that is well positioned to handle cyclical sales trends. The company has managed to build a dependable brand name over the years, which would gain further visibility during the companies 50th anniversary this year, the analysts add.

AG Edwards expects the ATV division, which generated 60% of the company's revenues in 2002, to post continued growth in the long term. The analysts' "neutral" rating is based on the concerns surrounding the stiff competition from John Deere's ATVs and on the fair valuation of Polaris Industries’ stock.

The EPS estimates for 2003 and 2004 are $4.90 and $5.43, respectively. The P/E estimates for 2003 and 2004 are 18.5x and 16.7x, respectively.

Merrill Lynch initiates coverage of Polaris Industries with a "neutral" rating.