In a report published Thursday, analysts at Cowen and Company downgraded shares of Vera Bradley, Inc. VRA from Market Perform to Underperform. The firm also cut its price target from $21 to $13. These demotions follow the company's downbeat fourth quarter results and weak guidance on Wednesday.
Related Link: Vera Bradley Posts Downbeat Q4 Results, Issues Weak Outlook
The report states that, although the company's efforts are apparent, Cowen remains cautious on the risk/reward profile and the brand relevance. They model "further downside possible as fear challenging new cust acq, quantity of new product launches add risk/confusion, & margin/FCF profile on declining path."
The company's "honest management team [is] making strong efforts" to counteract negative comps and "to improve brand equity, reach more customers & enhance product assortments." While the analysts are encouraged by this trend, they are worried about multiple issues. Namely:
- Deteriorating (and downside risk to) comps
- Margin pressure and free cash flow decline "draw attention to long-term viability and deter valuation."
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in