UPDATE: Citigroup Upgrades Sotheby's to Buy, Raises PT on New Picture of Long-Term Value Creation

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In a report published Tuesday, Citigroup analyst Oliver Chen upgraded the rating on
Sotheby'sBID
from Neutral to Buy, and raised the price target from $45.00 to $55.00. In the report, Citigroup noted, “We're upgrading BID to Buy as we do expect Sotheby's to evaluate & execute upon a combination of activities which should drive stock upside from here: HQ sale leaseback, monetization of accounts receivable, return to selling of lower value lots, incremental leverage, LBO/M&A, and/or revenue driving strategic options. Strategically speaking: BID could return to selling lower value lots, license the brand into other disciplines, and pursue eComm/Asia even more aggressively while leveraging its existing brand brawn. We also believe a global M&A backdrop supports valuation & our LBO analysis indicates a 15-18% return achievable at a $50-55 price. In our view, BID will need to make choices given new owners: 5.7% Third Point, 4.9% Marcato, & 3% Trian.” Sotheby's closed on Monday at $47.57.
Posted In: Analyst ColorUpgradesAnalyst RatingsCitigroupOliver Chen
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