Imperial Capital Just Downgraded Performance Sports Group
In a report published Monday, Imperial Capital analyst John O'Neil downgraded Performance Sports Group Ltd (NYSE: PSG) from Outperform to In-Line, while reducing the price target from $23 to $20. Currency headwinds could exert more pressure on earnings into FY16, O'Neil said.
Performance Sports Group reported sales of about $660mn and adjusted EBITDA of about $106mn for the latest 12 month period ended February 28, 2015. The company reported $410.5mn in net debt.
While the company has generated solid organic sales growth and appears to be well positioned in its categories, the sales deceleration and currency headwinds could exert significant pressure on the estimates for 4Q and FY16. "Although we reduced our earnings estimates after 2Q15, as we update our model and prepare for 4Q15, it again appears estimates have not come down enough," O'Neil wrote.
In the report Imperial Capital noted, "With back to hockey bookings flat with last year and the lapping of the Easton acquisition in the current quarter, we anticipate lower sales and EBITDA in the first half of FY16, which in our opinion makes any multiple expansion for the stock over the next few quarters unlikely."
The EPS estimates for FY15 and FY16 have been reduced from $1.08 to $1.06 and from $1.17 to $0.94, respectively.
Latest Ratings for PSG
|Sep 2016||Craig-Hallum||Initiates Coverage on||Hold|
|Aug 2016||RBC Capital||Downgrades||Sector Perform||Underperform|
|Aug 2016||DA Davidson||Downgrades||Buy||Neutral|
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