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Brean Capital: Groupon 'Delivered The Goods' During Black Friday And Cyber Monday

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Brean Capital: Groupon 'Delivered The Goods' During Black Friday And Cyber Monday
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Tom Forte of Brean Capital said in a note on Wednesday he is now more bullish on shares of Groupon Inc (NASDAQ: GRPN) following the company's strong holiday sales.

Groupon said on Tuesday that it achieved record North American sales on Black Friday and Cyber Monday and that those two days represented the largest sales day in history.

“We are especially encouraged by the news because we believe its multitude of efforts to improve margin that were outlined at its November 2014 analyst day suggest the strong sales may be coupled with a decent margin,” Forte wrote. The analyst adds that in the past, Groupon's upside in revenue was typically met with “significant” margin pressures but this may no longer be the case.

Groupon, Inc. - Stock Price and Volume | FindTheBest

According to Forte, Groupon's strategy of increasing its inventory helped sales as the company increased the likelihood of its consumers finding something that interested them. The analyst notes that this strategy is “very encouraging” and motivates consumers to “pull” deals from the site instead of the company's old strategy of “pushing” offers to consumers.

Forte adds that Groupon's performance over the shopping season supports his view that consumers are “increasingly” turning to the company's site to purchase deals across multiple categories, especially beyond discretionary items.

Shares are Buy rated with a $10 price target.

Latest Ratings for GRPN

DateFirmActionFromTo
Apr 2017Morgan StanleyDowngradesUnderweight
Mar 2017BarclaysInitiates Coverage OnUnderweight
Mar 2017CitigroupInitiates Coverage OnNeutral

View More Analyst Ratings for GRPN
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Posted-In: Black Friday Brean Capital Cyber Monday Groupon Tom ForteAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

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