Riding the Wave: Desjardins Shifts BRP to ‘Buy’ as Fundamentals and Sentiment Align

BRP Inc. (DOOO), a global leader in the design and manufacturing of powersports vehicles and propulsion systems, has just received a significant vote of confidence. On May 30, 2025, Desjardins—a prominent Canadian financial institution—upgraded the stock from ‘Hold’ to ‘Buy,’ following the company’s explosive first-quarter earnings report and a dramatic surge in share price. This upgrade marks a pivotal moment for investors, as it underscores a potential inflection point for BRP amid renewed sector optimism and robust financial execution. Analyst upgrades are often catalysts for price momentum, particularly when aligned with strong operational results, and can signal to investors both institutional conviction and changing market narratives.

Key Takeaways:

• Desjardins upgrade signals renewed institutional confidence in BRP, shifting from ‘Hold’ to ‘Buy’.

• Shares surged over 13% in a single session following a major earnings beat, now up 8.35% to $43.94.

• Recent news highlights both robust financial results and boardroom stability, boosting market sentiment.

• Technical indicators show elevated momentum (RSI ~77), suggesting the stock is entering overbought territory.

• Despite recent volatility and a significant drawdown from last year’s highs, valuation appears compelling as fundamentals improve.

Analyst Upgrade and the Weight of Desjardins’ Conviction

Desjardins, one of Canada’s largest and most respected financial institutions, is known for its deep expertise in covering North American industrials and consumer sectors. The firm’s research is widely followed by institutional investors, with upgrades from Desjardins frequently influencing trading flows and peer coverage. Their decision to lift BRP to a ‘Buy’ rating, after a period of caution, is particularly meaningful given the context:

"Crushing beats on both the top and bottom lines by Bombardier Recreational Products (DOOO 12.89%), or BRP, clearly impressed the stock market on Thursday."
— The Motley Fool, May 29, 2025

While Desjardins did not provide a new price target with this upgrade, the shift in rating is a clear endorsement of BRP’s improving fundamentals and market positioning. The timing—right after a blowout earnings report—suggests the analyst sees a sustainable change in BRP’s growth trajectory, not just a transient pop.

BRP: Business Model, Sector Dynamics, and Competitive Edge

BRP Inc. operates at the intersection of recreation and transportation, manufacturing a suite of best-in-class vehicles including Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am off-road/on-road vehicles, and Rotax engines. The company leverages a vertically integrated business model, controlling design, manufacturing, and distribution, which enables it to adapt quickly to shifting consumer trends and supply chain challenges. BRP’s diversified product line and global reach (serving over 120 countries) provide resilience against regional slowdowns and cyclical swings in discretionary spending.

The powersports sector has historically been sensitive to consumer confidence and macroeconomic cycles. However, post-pandemic trends have favored outdoor recreation, while BRP’s innovation pipeline (notably electrification and connected vehicles) positions it for structural growth. The upgrade from Desjardins comes as the industry shows signs of renewed momentum, with inventories normalizing and demand rebounding across key markets.

Financial Performance: Earnings Catalysts and Fundamental Strength

The latest quarterly results were nothing short of spectacular. According to the recent earnings call transcript and news coverage, BRP delivered:

• Earnings and revenue beats: Both top and bottom lines exceeded analyst expectations, reflecting strong volume growth and margin expansion.

• Improved operating leverage: The company’s vertically integrated manufacturing and disciplined cost controls helped drive profitability.

• Healthy balance sheet: BRP is managing leverage prudently, supporting continued investment in product innovation and market expansion.

Stock Price Performance: Recent Volatility and Opportunity

• Current price: $43.94, up 8.35% today and nearly 13% since the earnings release.

• Yearly range: The stock hit a low of $31.78 (April 21, 2025) and a high of $74 (July 31, 2024), indicating significant volatility and a sharp drawdown from last year’s peak.

• Volume surge: Trading volume spiked to 123,546 shares today, well above the average daily volume of 163,001, underscoring strong investor interest.

• Technical momentum: The stock’s RSI has reached 77.6—often a signal of overbought conditions—while the 20-day EMA and SMA are $37.15 and $36.65, respectively, well below the current price, indicating a powerful upward move.

Sentiment and Volatility

• Sentiment ratio: 0.48 (nearly equal up and down days over the past year), but the tide appears to be turning bullish in recent weeks.

• Average daily volatility: 1.78%, which may appeal to swing traders and risk-tolerant investors.

Newsflow: Momentum Fueled by Earnings and Board Stability

Recent headlines have amplified the positive narrative:

• Earnings Beat: As reported by The Motley Fool, BRP’s blowout quarter sparked a double-digit rally, with analysts citing both demand strength and operational excellence.

• Boardroom Stability: The announcement of director elections and committee composition reassures investors of governance continuity and strategic focus (PRNewswire).

• Investor Engagement: The Q1 2026 earnings call featured robust Q&A with major sell-side analysts, reflecting heightened institutional engagement (Seeking Alpha).

What Does the Upgrade Mean for Investors?

Desjardins’ upgrade is more than a routine analyst action—it’s a signal that institutional sentiment is shifting decisively in favor of BRP. Analyst upgrades tend to attract both momentum traders and long-term investors, especially when backed by tangible operating improvements.

The key questions now are:

• Is the recent rally sustainable, or is it a temporary reaction to earnings?

• Does BRP’s valuation remain attractive after the recent move, especially given its historical volatility?

• How does the company’s innovation pipeline (notably in electrification and connected vehicles) stack up against peers?

Potential Upside: Implied Valuation and Market Opportunity

While Desjardins has not published a new price target, the market’s reaction suggests that expectations for FY2026 and beyond have reset higher. With shares still well below last year’s highs, there is room for continued recovery if execution remains strong and sector tailwinds persist. The current price of $43.94 is still a significant discount to the $74 high, representing potential upside of nearly 70% if BRP can reclaim previous levels—a scenario that will depend on both company-specific and macroeconomic factors.

Risks and Considerations

Despite the bullish technicals and renewed analyst support, investors should be mindful of:

• Sector Cyclicality: Powersports demand is inherently cyclical and sensitive to consumer trends.

• Valuation Stretch: The recent rally has pushed technical indicators into overbought territory.

• Execution Risk: Continued outperformance will require BRP to deliver on its innovation roadmap and navigate potential macro headwinds.

Conclusion: A Turning Point for BRP?

Desjardins’ upgrade signals a pivotal shift in market sentiment for BRP Inc., coming on the heels of a transformative quarter. With fundamentals strengthening, technical momentum building, and institutional confidence on the rise, BRP is positioned as a high-conviction idea for investors seeking both growth and a potential rebound in discretionary consumer sectors. While volatility and sector risks persist, the alignment of analyst support, earnings momentum, and industry dynamics make BRP one of the more intriguing large-cap opportunities in North American recreation and mobility.

As always, investors should remain vigilant, balancing the excitement of a fresh upgrade and breakout price action with the discipline of risk management and ongoing fundamental monitoring.