Companies in the Services sector have received a lot of coverage today as analysts weigh in on L Brands (LB), Target (TGT) and GMS Inc (GMS).
L Brands (LB)
Barclays analyst Chethan Mallela maintained a Buy rating on L Brands today and set a price target of $31. The company’s shares closed yesterday at $26.93, close to its 52-week low of $23.71.
Mallela wrote:
“We continue to view LB as undervalued and Seeing the Forest for the SOTPs see ample opportunity for value creation, which should only be enhanced by the presence of an activist, but do not think a separation is the best path to achieve this objective.”
According to TipRanks.com, Mallela is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -9.5% and a 24.3% success rate. Mallela covers the Services sector, focusing on stocks such as Capri Holdings Limited, Ralph Lauren Corp, and TJX Companies.
Currently, the analyst consensus on L Brands is a Hold with an average price target of $30.69, implying a 14.0% upside from current levels. In a report issued on February 21, B.Riley FBR also reiterated a Buy rating on the stock with a $41 price target.
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Target (TGT)
In a report released yesterday, Matthew McClintock from Barclays maintained a Hold rating on Target, with a price target of $85. The company’s shares closed yesterday at $76.
According to TipRanks.com, McClintock is a 4-star analyst with an average return of 7.2% and a 56.2% success rate. McClintock covers the Services sector, focusing on stocks such as Advance Auto Parts, Bed Bath & Beyond, and Foot Locker Inc.
Target has an analyst consensus of Moderate Buy, with a price target consensus of $85.43, a 12.4% upside from current levels. In a report issued on February 26, Citigroup also maintained a Hold rating on the stock with a $78 price target.
GMS Inc (GMS)
Barclays analyst Matthew Bouley maintained a Buy rating on GMS Inc yesterday and set a price target of $21. The company’s shares closed yesterday at $17.09.
Bouley wrote:
“We view improving sales trends to start the calendar year as well as a healthy commercial backlog that gives reasonable visibility to the balance of 2019 as lending confidence to GMS’s ability to generate mid-single digit organic sales growth in the medium term (we est. 4% in FY’20). Although we are shifting our forward margin assumptions lower, mainly to reflect reduced sales leverage vs. our prior estimate, we continue to expect 40bps of adj. EBITDA improvement in FY’20 on cost saving initiatives reaching run-rate as well as Titan synergies that should reflect more meaningfully as January purchasing contracts flow into results. FY’19 FCF yield, GMS remains attractive in light of our view of MSD top-line growth alongside non-cycle dependent margin improvement.”
According to TipRanks.com, Bouley is a 2-star analyst with an average return of 0.0% and a 47.9% success rate. Bouley covers the Industrial Goods sector, focusing on stocks such as Continental Building Products, Advanced Drainage Systems, and Builders Firstsource.
GMS Inc has an analyst consensus of Strong Buy, with a price target consensus of $23.25.
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