Polaris Up As Analyst Lifts Price Target

Edward Aaron of RBC Capital Markets said in a client note that sales of Polaris' side-by-side all-terrain vehicles are solid, with dealers reporting "strong double-digit sales gains, high margins and manageable inventory levels."

The analyst did note, however, that Polaris' core ATVs are not performing up to par, with excess inventory and increased promotional efforts weighing on the segment. The company, which makes snowmobiles, motorcycles and ATVs, did get a bit of a reprieve, though, as its snowmobile business performed a bit better due to more favorable snow conditions.

Aaron boosted Polaris' price target to $51 from $45, but maintained a "Sector Perform" rating.

"Limited visibility beyond the first half of 2008 requires a wait-and-see approach between now and the summer dealer meeting in July (when product news is out and the selling season is more complete)," he added.

Shares of Medina, Minn.-based Polaris gained $1.33, or 3.1 percent, to $44.40 in afternoon trading. The stock has traded between $34.96 and $58.78 over the past 52 weeks.