Aaron's Downgraded On Valuation

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Aaron's, Inc. AAN is an omnichannel provider of lease-purchase solutions and it operates through five business segments.

The Analyst

Loop Capital Markets' Anthony Chukumba analyst downgraded Aaron's from Buy to Hold and maintained the price target of $42.

The Thesis

Chukumba sees valuation as a main reason for the downgrade. The stock is trading close to his price target of $42, which is based on 14.7 times multiple of 2018 diluted earnings per share. The analyst has a bullish view on the company's business segment Progressive and he expects the tax reform to have a positive effect on the company.

Chukumba expects Aaron's core business to benefit from acquired former franchise SEI/Aaron's Inc.. He added that the stock has been experiencing volatility lately so he wants to wait for a better entry point.

Price Action

The stock is trading about 1 percent lower at $41.66. It's gained around 3.5 percent year to date.

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Posted In: Analyst ColorDowngradesPrice TargetAnalyst RatingsAnthony ChukumbaLoop Capital Markets
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