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UPDATE: The Benchmark Company Reiterates On 1-800-Flowers.com As Upside Is Still Left

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In a report published Monday, The Benchmark Company analyst Daniel L. Kurnos reiterated a Buy rating on 1-800-Flowers.com (NASDAQ: FLWS), and raised the price target from $7.00 to $10.00.

In the report, The Benchmark Company noted, “Shares of 1-800-Flowers.com (FLWS-Buy) continue to rally following the strong acquisition of Harry & David (H&D) even despite the issuance of what we view as conservative FY15 revised adjusted EBITDA guidance of $90 million. Assuming an F1Q15 (September) loss of ~$13 million for H&D, this would imply consolidated adjusted EBITDA of ~$77 million on a full-year proforma basis, roughly $3 million below our previous forecast. However, we reiterate that the outlook continues to neglect both cost and revenue synergies, and while the latter may not be recognized in year 1, we expect combined synergies of $15-$20 million ought to be attainable in the first fully consolidated year (FY16). Assuming the low end of synergies were recognized in FY15, with our cost synergies only offset by one-time integration costs, we believe a fair 2015 proforma adjusted EBITDA estimate is $83 million (including the September quarter for H&D). Assigning a 9x EV/EBITDA multiple, still a 2 turn discount to FTD (FTD-Not Rated) at 11x, results in a $10 price target. Again, our estimates do not take into account any material benefit from the multi-branded portal, which should enhance revenue synergies in FY16.”

1-800-Flowers.com closed on Friday at $8.23.

Latest Ratings for FLWS

DateFirmActionFromTo
Oct 2020DA DavidsonMaintainsNeutral
Aug 2020DA DavidsonUpgradesUnderperformNeutral
Jul 2020DA DavidsonMaintainsUnderperform

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