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Party City In 2017: 'Healthy Underlying Trends, Numerous Growth Opportunities'

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Party City In 2017: 'Healthy Underlying Trends, Numerous Growth Opportunities'
Related PRTY
Earnings Scheduled For March 9, 2017
Earnings Scheduled For November 10, 2016

Party City Holdco Inc (NYSE: PRTY) will likely deliver improved results in 2017, with mid-to-high single-digit EBITDA growth and low double-digit EPS growth. This will be backed by “a relatively more normal seasonal calendar,” Frozen comps and growth opportunities for the wholesale business, Credit Suisse’s Seth Sigman said in a report.

Sigman maintained an Outperform rating on the stock, with a price target of $19. He commented, “We continue to believe that the PRTY story stacks up well, based on healthy underlying trends and a unique vertically integrated model that provides incremental sales drivers, continued margin benefit, and helps navigate the inherent volatility in retail.”

Improvement In 2017

Party City’s "everyday" business grew 3 percent in 2016, with growth accelerating in the last two quarters. The fourth quarter reflected continued stability in the company’s non-seasonal business despite volatility due to holiday shifts. The analyst expects "everyday" to continue improving in the first half of 2017.

Related Link: Party City Announces the Acquisition of Granmark

Halloween, the biggest sales event, was negatively impacted in 2016 by a shift to Monday, but should be neutral in 2017. Management doesn't expect the shift of Easter into Q2 to have a meaningful impact on Q1 comps. The shift of New Years out of Party City’s 2017 fiscal year will likely have a 30-50 bps [basis points] impact on 2017 comps and a 100 bps on Q4 comps, Sigman mentioned.

Apart from these seasonal considerations, the company’s performance should be relatively stable, the analyst mentioned.

Latest Ratings for PRTY

DateFirmActionFromTo
Nov 2016BMO CapitalInitiates Coverage OnMarket Perform
Oct 2016Goldman SachsInitiates Coverage OnNeutral
Aug 2016Goldman SachsMaintainsNeutral

View More Analyst Ratings for PRTY
View the Latest Analyst Ratings

Posted-In: Credit Suisse Seth SigmanAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga

 

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