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DA Davidson Initiates XCel Brands With A Buy Rating

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XCel Brands Inc (NASDAQ: XELB) announced Thursday it appointed Deborah Weinswig, a leading global retail analyst, to its board of directors.

The Analyst

D.A. Davidson's Andrew Burns initiated XCel Brands with a Buy rating and a 12-18 months price target of $5.

The Thesis

The company has a unique Quick Time Response (QTR) platform, which allow fast deliveries of on-trend products to department stores, the analyst said. He sees the platform and XELB's legacy television business as crucial for the future earnings growth. QTR currently has small retail sales of approximately $20 million, but the management sees it as a $600 million opportunity, explained Burns.

The analyst expects the existing cash flow is going to be sufficient to fund the business and cover debt requirements. He forecasts 2018 revenue and EPS at $33.5 million and 27 cents per share and 2019 revenue and EPS at $37.6 million and 35 cents per share. Burns explained that the $5 price target is based on 14 times 2019 EPS estimate. The stock is going to outperform as the company executes its growth plan, Burns said.

The Price Action

XCel Brands fell around 1 percent Thursday. The stock is trading around 40 percent below its 52-week high of $5.

Latest Ratings for XELB

Feb 2018DA DavidsonInitiates Coverage OnBuy
Aug 2014WunderlichInitiates Coverage onBuy
Apr 2013Brean CapitalInitiates Coverage onBuy

View More Analyst Ratings for XELB
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Posted-In: D.A. Davidson Deborah WeinswigAnalyst Color Price Target Initiation Analyst Ratings


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