Lakeland Industries, Inc. LAKE closed Tuesday's trading session up 7.27 percent after the World Health Organization confirmed an Ebola outbreak in the Democratic Republic of the Congo.
The producer of protective clothing isn’t guaranteed a significant sales boost, according to Roth Capital Partners.
The Rating
Analyst Dave King maintained a Buy rating on Lakeland with an $18 price target.
The Thesis
The 2014 Ebola outbreak prompted 5-6-percent revenue growth for Lakeland over 12 months, with an estimated 20-40-cent pop in earnings per share, King said in a Tuesday note.
“While Lakeland may be better-positioned this time around to capture any increased demand, certain governments may already have product on hand, and it remains unclear whether this current outbreak will reach 2014’s ‘international health emergency’ status,” the analyst said.
The WHO has confirmed two cases of Ebola, with 21 suspected cases of viral hemorrhagic fever, King said.
The analyst's bullish rating stands independent of any Ebola-related sales, he said.
“We reiterate our Buy to reflect Lakeland’s expanding share in a growing end market, the potential for meaningful ROIC improvement through planned capacity addition and growth initiatives and LAKE’s attractive valuation and positioning as a takeout candidate."
Price Action
Lakeland shares ended Tuesday's session at $15.50, up 7.27 percent.
Related Links:
An Ebola-Fighting Portfolio For The Present And The Future
4 Ebola Researching Biotech Companies For Your Portfolio
Photo courtesy of Lakeland Industries.
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