Fleetwood (ASX:FWD) offers significant upside after its strategic restructuring, acquisition of the Red Dog Village, and improving outlook for Building Solutions despite near-term earnings being weighed down by one-off restructuring costs, Euroz Hartleys said in a Thursday note.

The company expects the recently acquired Red Dog Village in Karratha to generate annualized earnings before interest and taxes (EBIT) of between AU$10 million and AU$20 million once settlement is completed in January 2027.

Euroz Hartleys said Searipple Village is expected to remain a key earnings driver, with occupancy projected to be 98% contracted for the first half of fiscal 2027 and between 75% and 85% contracted across the full fiscal year.

The research firm revised its forecasts to reflect the Red Dog acquisition and applied cautious assumptions for the Building Solutions division's recovery, noting that the closure of the New South Wales modular building facility is expected to help the business return to profitability in fiscal 2027.

It assumes Searipple will operate at 75% utilization, Red Dog will deliver around AU$15 million in EBIT by the end of fiscal 2027, and Building Solutions will exit the year on an annualized earnings run rate of about AU$10 million.

Euroz Hartleys maintained its buy recommendation on Fleetwood while raising its price target to AU$3.38 from AU$3.13.

The company's shares rose around 7% in recent Friday trade.