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UPDATE: Sterne Agee Raises PT to $34 on Sally Beauty Holdings on Stock Buyback

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Top 4 Mid-Cap Stocks In The Specialty Retail, Other Industry With The Highest ROA
Earnings Scheduled For November 14, 2013

Sterne Agee maintained Sally Beauty Holdings (NYSE: SBH) with a Buy rating and raised the price target from $30.00 to $34.00.

Sterne Agee said, "SBH's new $700 million repurchase authorization is likely to be used over the next 8 quarters and presents material EPS accretion potential. … [W]e believe SBH has an underappreciated capability to shrink the float via free cash flow and financial engineering. The company had $33 million remaining on its prior program, suggesting $145 million spent QTD to buy back shares. Given the material increase in authorization, we now assume SBH repurchases $87.5 million of stock for each of the subsequent 8 quarters, also issuing enough debt ($90 million combined over the next two years) to keep its cash balance above $50 million. Even with the increased interest expense, the lower share count results in material EPS accretion."

Sally Beauty Holdings closed at $28.48 on Tuesday.

Posted-In: Sterne AgeeAnalyst Color Price Target Analyst Ratings

 

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