Shares of BRP Inc. (DOOO) are soaring 5.13% in pre-market trading on Friday, following a series of analyst upgrades that paint a more optimistic picture for the leisure vehicle manufacturer. The stock's surge comes as several prominent financial firms have raised their ratings and price targets, citing improving inventory conditions and growth prospects.

Stifel Nicolaus analyst Martin Landry upgraded BRP to a Buy from Hold, setting a new price target of CA$68, up significantly from the previous CA$45. Similarly, Desjardins analyst Benoit Poirier upgraded the stock to Buy from Hold, raising the price target to C$78 from C$77, stating that "the worst is over" for the company. TD Cowen also joined the chorus, upgrading BRP to Buy from Hold, although their specific price target was not immediately available.

The upgrades are primarily driven by BRP's improving inventory situation, which analysts believe will pave the way for revenue growth and margin expansion. TD Cowen's Brian Morrison noted that the easing of inventory headwinds could support market-share gains for BRP. Despite a cautious outlook on near-term consumer demand, Morrison stated, "The cadence of recovery remains uncertain, but we have visibility to trough earnings that no longer warrants a trough multiple." This sentiment suggests that while challenges may persist in the short term, the long-term outlook for BRP has significantly improved, justifying the stock's current rally and potentially setting the stage for further gains.