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MarineMax is a smart pick for investors looking for beneficiaries of lower interest rates, according to Citi. Analyst James Hardiman upgraded shares of the boat dealer to buy from neutral and upped his price target by $4, or 10%, to $44. Hardiman’s new target suggests MarineMax can surge nearly 52% compared to Friday’s close. Key to Hardiman’s upgrade is the idea that the stock can get a boost when the Federal Reserve cuts interest rates. That is because boats and other big-ticket items are more expensive as financing costs grow. “At the most basic level, HZO is a strong play on the Fed pivot,” the analyst said, referring to the Federal Reserve. “Boat affordability has been hit hard (maybe hardest) by the higher for longer rate environment and stands to benefit mightily in a soft-landing scenario.” After holding interest rates steady at 5.25% to 5.50% for more than a year, the long-awaited first cut may come as soon as next week. Fed funds futures traders are unanimous in anticipating policy will ease at the end of the two-day central bank meeting next week, according to CME’s FedWatch Tool. The only divergence on Wall Street is whether borrowing costs will ease a quarter or a half of one percentage point. Beyond that, Citi pointed to the monetization opportunities within marina real estate as another cause for optimism. Though Hardiman noted MarineMax management has been loath to pursue this strategy historically, he said there will be pressure to do so if the traditional path for share upside does not pan out. HZO YTD mountain MarineMax, year to date “This story embodies both substantial upside and limited downside, and is worth a second look for investors looking for sizable risk-adjusted returns,” Hardiman told clients in his Monday note. Shares briefly popped more than 7% in early Monday trading, a reprieve after a tough 2024, when MarineMax shares have tumbled more than 21%.
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