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Morgan Stanley Keeps Overweight On National Vision After First Earnings Report

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Morgan Stanley Keeps Overweight On National Vision After First Earnings Report

National Vision Holdings Inc (NASDAQ: EYE) posted its first earnings report as a public company Thursday. It reported an EPS of 8 cents, a penny better than the consensus.

The Analyst

Morgan Stanley's Simeon Gutman reiterated an Overweight rating on National Vision with a $36 price target.

The Thesis

National Vision reported strong comps of 9.1 percent, which included approximately 160 bps of hurricane-related headwinds, Gutman said in a Thursday note. (See Gutman's track record here.) 

The company's gross margin declined approximately 90 bps, but lower SG&A led to flat EBIT margin and 15-percent EBIT growth, which is Gutman's long-term forecast for the business. The analyst said he expects to see a meaningful upside to comp estimates over the next few years as National Vision takes market share.

The company offers defensiveness given its strong positioning in the non-cyclical eyeglass industry and growth through store expansion, said Gutman. His $36 price target assumes 6-percent comps and 20 bps of annual EBIT margin expansion and implies a 15 times 2019 EBITDA multiple.

The Price Action

National Vision Holdings Inc (NASDAQ: EYE) is trading 0.85 percent higher at $33.18 at the time of publication Friday. The stock has gained about 15 percent since its first trading session Oct. 26. 

Related Link:

An Analyst Gives 8 Reasons To Buy National Vision 

Latest Ratings for EYE

DateFirmActionFromTo
Nov 2018CitigroupMaintainsBuyBuy
Oct 2018Morgan StanleyMaintainsOverweightOverweight
Oct 2018William BlairInitiates Coverage OnOutperform

View More Analyst Ratings for EYE
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Simeon GutmanAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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