Market Overview

Baird Downgrades Duluth Holdings After 40% Gain

Share:
Baird Downgrades Duluth Holdings After 40% Gain
Related DLTH
48 Biggest Movers From Friday
54 Biggest Movers From Yesterday

With the stock up more than 40 percent since February 2017, now is the time for Duluth Holdings Inc (NASDAQ: DLTH) investors to move to the sidelines, according to Baird.

The Analyst

Baird's Jonathan Komp downgraded Duluth Holdings from Outperform to Neutral with an unchanged $30 price target.

The Thesis

Shares of Duluth Holdings, a maker of casual wear, workwear and accessories, are up nearly 70 percent in the past three months alone due to a strong retail backdrop and increased confidence in the company's growth strategy and e-commerce platform launch, Komp said in the downgrade note. (See his track record here.)

The strong gains in the stock reflect the favorable outlook, including expectations for 20-percent earnings growth in fiscal 2019, the analyst said. 

Duluth shares are trading near 30 times NTM P/E, which is a premium to its historical average of 26.5 times and a premium to rival apparel maker Lululemon Athletica inc. (NASDAQ: LULU), which has a five-year average multiple of 27 times.

The case for a higher valuation is supported by the following factors, Komp said:

  • The improvement of the e-commerce business while simultaneously avoiding the margin pressures other retailers of multiple brands face.
  • Additional benefits from sales of Duluth-branded merchandise that reduce the need to discount.
  • Long-term targets that add to the attractive growth story.
  • A solid management that's executing well. 

Price Action

Duluth Holdings shares were trading lower by 0.3 percent Thursday afternoon at $28.52. 

Related Links:

For Duluth, Risks May Be Growing Faster Than Earnings

Duluth Is One Of The Best Unit Growth Stories In Specialty Retail

Latest Ratings for DLTH

DateFirmActionFromTo
Sep 2018Stifel NicolausMaintainsHoldHold
Aug 2018BairdDowngradesOutperformNeutral
Jun 2018William BlairUpgradesMarket PerformOutperform

View More Analyst Ratings for DLTH
View the Latest Analyst Ratings

Posted-In: Apparel Baird Jonathan Komp retailAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (LULU + DLTH)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
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.

Goldman Sachs Lifts Sell Rating Off Nielsen Amid M&A Potential

Attention Gamers! Blockchain Is An Interesting New Way To Support The Industry