Brunswick, the parent company of Sea Ray, is shifting its strategy to overcome sluggish new boat sales, which are expected to remain subdued through 2026 with an estimated fewer than 135,000 U.S. retail sales this year. The company is betting on AI-powered technology and an increase in aftermarket and recurring revenue streams. Roughly 60% of Brunswick's earnings already come from these sources, a mix that analyst Scott Stember of Roth Capital Partners believes provides significant exposure beyond new boat sales. Brunswick projects annual sales of 145,000 to 160,000 units by 2030, a modest recovery from current levels. KeyBanc anticipates growth driven by pricing, a richer premium-product mix, market-share gains, and new product innovation.
One key technological innovation is Simrad AutoCaptain, an autonomous boating system that allows boats to dock themselves, undock, and maneuver in tight spaces. This system uses six cameras and two GPS receivers to create a digital map, controlling throttles, steering, and bow thrusters. Currently, AutoCaptain is available only on new-build boats equipped with Mercury engines and joystick control, with the Boston Whaler 405 Conquest being the first to offer it. While pricing hasn't been announced, it's expected to be in the range of $30,000 to $50,000. Brunswick CEO David Foulkes notes that premium boats are showing resilience, while value boats are more affected by interest rate pressures.
Another significant part of Brunswick's strategy is the Freedom Boat Club, a membership service providing access to boats at various global locations. This club has more than tripled its membership since 2019 to over 63,000 members, with trips and reservations growing fourfold across more than 450 locations and a fleet of approximately 5,000 boats. About 90% of the club's sales are recurring, contributing significantly to Brunswick's recurring revenue profile. This provides a stable income stream, especially as new boat sales remain weak. Brunswick is targeting $7 billion to $8 billion in revenue by 2030, with operating margins of 10% to 13% and earnings between $8 and $12 per share. Shares of Brunswick currently trade at about $82, with Roth rating them a buy with a $94 price target.
