UPDATE: Morgan Stanley Initiates Coverage On Vitamin Shoppe On EPS Upside Potential
In a report published Tuesday, Morgan Stanley analyst Simeon Gutman initiated coverage on Vitamin Shoppe (NYSE: VSI) with an Overweight rating and $54.00 price target.
In the report, Morgan Stanley noted, “We are initiating coverage of VSI with an Overweight rating and a $54 price target, as we believe the stock should benefit from both earnings upside and a possible multiple re-rating over the next 12 months. We do not believe the stock is pricing in an accelerating EPS growth rate and likely upside to consensus. Our 3% above consensus 2015 estimate of $2.90 reflects 10% sales growth and 80 bps of EBIT margin expansion and would be fueled by healthy 4-5% comps, modest gross margin expansion, stronger sales-driven expense leverage and the winding down of supply chain investments (worth $0.04-$0.05).”
Vitamin Shoppe closed on Monday at $44.41.
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