Emerald Expositions Sell-Off Ends The Bearish Case, Goldman Says

The bearish case for owning Emerald Expositions Events Inc EEX, formerly known as Expo Event Holdco, has come to an end as the stock's valuation looks attractive after a 16 percent decline over the past six months, according to Goldman Sachs.

The Analyst

Goldman Sachs' Katherine Tait upgraded Emerald Expositions Events' stock from Sell to Neutral with an unchanged $20.20 price target

The Thesis

Emerald Expositions is a leading operator of business-to-business trade shows and somewhat protected by a high barrier to entry due to strong network effects in its top shows, Tait said in the report. There remains some concerns in the company's business, including a 38 percent exposure to the Gift, Home & General Merchandise segment which is exposed to the same pressures the overall retail industry faces.

But a bearish stance on the stock no longer applies given recent weakness in shares, the analyst said. Specifically, the stock is trading at a 16.3 times 2019E P/E multiple which "more fairly" reflects the company's organic growth outlook of 2.0 percent and EBITDA of $158 million to $162 million. The analyst's $20.20 price target implies an upside case of around 6 percent.

Price Action

Shares of Emerald Expositions Events were trading lower by less than a percent Thursday at $18.79.

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