Benchmark Company Reiterates Buy Rating, $13 PT on Smith & Wesson Holding Corporation on Raised FY13 Guidance

In a report published Wednesday, Benchmark Company reiterated its Buy rating and $13.00 price target on Smith & Wesson Holding Corporation

. Benchmark Company noted, “Smith & Wesson reported a strong Q3FY13 (January-end), with sales and EPS from continuing operations of $136 million and $0.26 vs. consensus estimates of $134 million and $0.23. Total firearm backlog at the end of the quarter was $668 million, up more than 236% y/y. More importantly, due to a quicker than expected increase in capacity, management increased its FY13 guidance from $555-$560 million in sales and $1.00-$1.05 in EPS to $575- $580 million in sales and $1.17-$1.19 in EPS, not including potential positive impact from the $15 million share repurchase program availability. This guidance now represents 40%-41% top-line growth, with approximately a 22% operating margin, up 1,200 bp year over year. We reiterate our BUY rating and $13 price target, which reflects a 5.7x FY13 EV/EBITDA multiple and a 5.6x FY14 EV/EBITDA multiple.” Smith & Wesson Holding Corporation closed on Tuesday at $10.22.