Here's Why Smith & Wesson Benefits From 'Normalized' Demand
Smith & Wesson Holding Corp (NASDAQ: SWHC) is profiting from a gun industry turnaround as dealers' inventory pruning comes to an end, an analyst said Wednesday.
The firearms manufacturer changed hands recently up more than 8 percent at $14.18. The company on Tuesday beat earnings expectations and raised its outlook.
Wunderlich's Rommel Dionisio boosted his target 13 percent to $17 and said improving fundamentals coupled with a major military contract will drive the stock higher.
Smith& Wesson's shares tanked last year when firearms sales fell from inflated levels after the so-called "Obama gun bubble" completed its course.
Dionisio said falling dealer inventory and a "normalizing of demand" are encouraging signs for gun makers generally, and for Smith & Wesson in particular.
Competitor Sturm, Ruger & Company (NYSE: RGR) has seen its shares gain more than 26 percent sine the company released a similarly upbeat outlook last week.
Sturm changed hands recently at $54.01, up 2.5 percent.
Dionisio said dealers' reduction in inventory will end by this summer, enabling gun makers to boost capacity utilization and thereby post wider profit margins.
Latest Ratings for SWHC
Date | Firm | Action | From | To |
---|---|---|---|---|
Nov 2016 | Lake Street | Downgrades | Buy | Hold |
Oct 2016 | Wunderlich | Downgrades | Buy | Hold |
Jun 2016 | Wunderlich | Maintains | Buy |
View More Analyst Ratings for SWHC
View the Latest Analyst Ratings
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: Rommel Dionisio WunderlichAnalyst Color Price Target Reiteration Analyst Ratings