Why Polaris Inc. (PII) Crashed on Monday

We recently compiled a list of the The 10 Worst-Performing Stocks on Monday. In this article, we are going to take a look at where Polaris Inc. (NYSE:PII) stands against the other stocks.

Ten companies kicked off this week’s trading with significant losses, mirroring a wider market pessimism over growing trade tensions.

The declines came following the US imposition of additional tariffs on goods from Canada, Mexico, and China, and signals of potential retaliation of taxes on US goods.

On Monday, the Dow Jones lost another 0.28 percent, while the S&P 500 and the Nasdaq Composite both registered steep declines of 0.76 percent and 1.20 percent, respectively. The slump came following President Donald Trump’s announcements that he would slap a 25-percent tariff on Canadian and Mexican goods, while a special 60-percent rate would be taxed on Chinese products.

Our list of Monday’s top losers only considered the companies with at least $2 billion in market capitalization and $5 million in daily trading volume.

A motorcyclist enjoying the open road on a sunny day.

Polaris Inc. (NYSE:PII)

Automotive manufacturer Polaris Inc. (NYSE:PII) dropped its share prices by 8.39 percent on Monday to end at $43.70 apiece after earning a downgraded outlook from investment research giant S&P Global.

According to S&P, it revised its credit rating outlook for Polaris from “stable” to “negative” based on expectations that S&P Global Ratings-adjusted debt to EBITDA will slightly exceed the 3x downgrade threshold in 2025.

While the company was expected to bank on free cash flow to repay debt, S&P Global said future deleveraging will partly depend on a recovery in the power sports industry and stable macroeconomic conditions.

Last year, Polaris and the broader powersports industry suffered a difficult retail environment, with total revenues declining by approximately 20 percent year-on-year. North American Powersports retail sales also saw an 8 percent drop, driven by higher interest rates and a delayed replacement cycle. The downturn is expected to persist through at least the first half of 2025.

Overall PII ranks 2nd on our list list of the worst performing stocks on Monday. While we acknowledge the potential of PII as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PII but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.