Market Overview

'Dramatic Improvements': Stifel Goes Full Bull On Conn's

Share:
'Dramatic Improvements': Stifel Goes Full Bull On Conn's

Furniture retailer Conn’s Inc (NASDAQ: CONN) shares saw a strong recovery in June that bulls expect to continue through the next year.

The Rating

Stifel Nicolaus analyst John Baugh upgraded Conn’s from Hold to Buy and raised the price target from $35 to $45.

The Thesis

"Dramatic improvements” have been made in the yield on Conn’s loan portfolio and the stability of charge-offs, Baugh said in the upgrade note. (See the analyst's track record here.) 

A breakeven in the credit business isincreasingly feasible by mid-2019 as no-interest promotions are reduced, rates rise in the direct loan program and delinquency trends and collections improve, the analyst said. 

“We are increasingly comfortable that the new management team has invested heavily in the underwriting and collections side of credit and will be much better equipped to address changing fundamentals in this business when they occur,” Baugh said.

Stifel forecast that comp sales will grow in the low-single-digit range as Conn’s moves forward from stunting immigration and weather concerns. The sell-side firm's estimates suggest top-line expansion between 8 and 10 percent through 2019.

“Importantly, we don't believe that management has to loosen credit underwriting decisions to drive this growth,” Baugh said. 

Price Action

Conn's shares were trading up 0.28 percent at $36 at the time of publication Wednesday. 

Related Links:

RH CEO: Warren Buffett Deserves Some Credit For Retailer's Turnaround

Wayfair's Better-Than-Expected Q1 Turns BofA Bullish

Public domain photo via Wikimedia. 

Latest Ratings for CONN

DateFirmActionFromTo
Dec 2018UpgradesNeutralBuy
Aug 2018Initiates Coverage OnBuy
Jul 2018UpgradesHoldBuy

View More Analyst Ratings for CONN
View the Latest Analyst Ratings

Posted-In: Furniture John Baugh retail Stifel NicolausAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (CONN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NVDACascendMaintains220.0
ADBECleveland ResearchInitiates Coverage On283.0
IMOCiBCUpgrades
RETAJefferiesMaintains254.0
SNAPAreteUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
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.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Go Back-To-School Shopping With This ETF

ECB Minutes Preview: How Dovish Is Draghi? 3 Things To Watch