Market Overview

Analyst Turns Bullish On Floor & Décor, Projects Comp, EPS Growth Ahead

Share:
Analyst Turns Bullish On Floor & Décor, Projects Comp, EPS Growth Ahead
Related
76 Biggest Movers From Yesterday
56 Stocks Moving In Thursday's Mid-Day Session
Penn Capital Management Co Inc Buys Nutrisystem Inc, Gardner Denver Holdings Inc, OraSure ... (GuruFocus)

After a pullback in shares that followed Floor & Decor Holdings Inc (NYSE: FND)'s first-quarter print and a meeting with CFO Trevor Lang, Piper Jaffray is upwardly revising its stance on the retailer. 

The Analyst

Analyst Peter Keith upgraded shares of Floor & Décor from Neutral to Overweight and increased the price target from $51 to $58.

The Thesis

Floor & Décor shares are attractive relative to other growth retailers given the company's superior comp and earnings per share growth, Keith said in a Wednesday note.

The analyst highlighted the following takeaways from his meeting with CFO Lang: 

  • Increased confidence in long-term competitive strengths and positioning.
  • Less drag from lapping hurricane comparisons beginning in the fourth quarter. 
  • A likely rebound in gross margins in 2019.
  • Healthy and sustainable comp growth in 2019 and beyond courtesy of the ramping of key operating initiatives in 2019.

The retailer is comfortable with the outlook for a moderation in hard surface flooring industry growth from 9 percent over the past five years to mid-single-digit growth for the next three to four years, Keith said. 

The following initiatives should support continued strong comp growth in 2019, according to Piper Jaffray: 

  • A pro loyalty program set for a launch in the second half of 2018. 
  • The ramping of a new national marketing effort.
  • Maturation curve benefits that should result in the bottoming of comps in Boston, Seattle and Long Island in 2019.

The Price Action

Floor & Décor shares were rallying 6.32 percent to $51.88 at the time of publication Wednesday afternoon.

Related Links:

Lightning Round: Jim Cramer Advises His Viewers On Chegg, Floor & Decor, Regeneron, And More

Stifel Downgrades Floor & Decor After 14% Year-To-Date Run

Latest Ratings for FND

DateFirmActionFromTo
Nov 2018Morgan StanleyInitiates Coverage OnEqual-Weight
Nov 2018Bank of AmericaUpgradesNeutralBuy
Nov 2018JP MorganMaintainsNeutralNeutral

View More Analyst Ratings for FND
View the Latest Analyst Ratings

Posted-In: Peter Keith Piper JaffrayAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (FND)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AMTDMorgan StanleyUpgrades65.0
APOMorgan StanleyDowngrades34.0
ARMKBairdUpgrades44.0
CGMorgan StanleyDowngrades23.0
EIXEdward JonesDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Athenahealth Notches Price Target Increase After CEO Departure, Strategic Alternative Announcement

Wall Street Analysts Weigh In On Ambarella's Q1 Earnings