Lake Street Weighs In On Smith & Wesson's Battenfeld Technologies Acquisition

On Friday, Lake Street Capital Markets analysts commented on Smith & Wesson Holding Corp’s SWHC acquisition of Battenfeld Technologies Inc.

“The acquisition will provide the company with several brands that are complementary to its firearms offerings and give the company a stronger presence in the hunting category. “

Chris Krueger finds “The acquisition is expected to be accretive to SWHC’s gross margins, EPS and cash flow immediately in fiscal 2016. Without considering potential synergies, it is expected to add revenue in excess of $55 million and EBITDA margins of 27%.”

Moreover, “In the long-term, we believe SWHC can grow its sales at a 10% rate and earnings in a range of 10%-15% on average over the next 5 years. This should allow its stock to eventually trade at a P/E of 10x to 15x.”

Shares of Smith & Wesson closed Wednesday at $9.69, up 1.3 percent.