BRP (TSX:DOO): Assessing Valuation After Strong Q3 Earnings, Higher 2026 Guidance and Steady Dividend

BRP (TSX:DOO) just released a busy Q3 update, pairing strong year over year earnings growth with higher 2026 guidance and a steady dividend. That combination can significantly influence how investors view the stock’s narrative.

See our latest analysis for BRP.

The market seems to be warming up to that story, with a roughly 18% 1 month share price return and about 47% year to date share price gain. The 1 year total shareholder return near 47% hints at building momentum rather than a short lived spike.

If BRP’s latest move has you thinking about what else could surprise to the upside, this is a good moment to explore auto manufacturers as potential next candidates.

With earnings surging, guidance raised for 2026 and the share price already posting hefty gains, is BRP still trading below its true potential, or is the market now fully pricing in that future growth?

Most Popular Narrative Narrative: 8% Undervalued

With BRP last closing at CA$106.54 against a narrative fair value of about CA$115.87, the story leans toward upside built on future earnings power.

In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.4x on those 2028 earnings, down from 33.2x today. This future PE is lower than the current PE for the CA Leisure industry at 25.8x.

Read the complete narrative.

Want to see why a lower future earnings multiple still supports a higher value today, and how profit margins and growth expectations quietly reshape the upside case? Read on to uncover the assumptions driving that gap.

Result: Fair Value of $115.87 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained macro uncertainty and tightening emissions regulations could weigh on discretionary powersports demand and margins, which may challenge the upbeat earnings trajectory.

Find out about the key risks to this BRP narrative.

Another Angle on Valuation

While the narrative fair value suggests around 8% upside, BRP’s 32.1x price to earnings ratio looks steep next to both peers at 31.5x and the global leisure average of 21.6x, even if it sits below a 35.6x fair ratio. Is the growth story strong enough to justify staying near the top of that range?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own BRP Narrative

If you see the numbers differently or want to stress test your own assumptions, you can quickly build a personalized BRP story in just a few minutes, Do it your way.

A great starting point for your BRP research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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