Oppenheimer analyst Rupesh Parikh maintained a Hold rating on Sally Beauty (NYSE: SBH) today. The company’s shares closed yesterday at $14.11, close to its 52-week low of $13.72.
Parikh observed:
“Following SBH’s report on 8/2, we updated our financial model to reflect a more aggressive investment stance from the SBH management team, incremental disruption risk shorter term, and new capital allocation priorities. We still believe one more reset of Street estimates is needed, but think our numbers now more accurately reflect the near-term challenges facing the organization. Even on our more muted assumptions, SBH shares trade at about 7x FY20E EBITDA and sport a double-digit FCF yield. We look favorably upon the more aggressive reset from management, but still believe it’s too early to speculate on a turn. We await signs of top-line stabilization and traction with upcoming initiatives such as boxed hair color and the loyalty rollout before becoming more constructive on the shares.”
According to TipRanks.com, Parikh is a 5-star analyst with an average return of 15.8% and a 61.6% success rate. Parikh covers the Services sector, focusing on stocks such as Blue Apron Holdings Inc, United Natural Foods, and Wal-Mart Stores Inc.
Currently, the analyst consensus on Sally Beauty is a Moderate Sell with an average price target of $14.75, implying a 4.5% upside from current levels. In a report issued on August 2, Jefferies also reiterated a Hold rating on the stock with a $14 price target.
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Based on Sally Beauty’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $58.23 million. In comparison, last year the company had a net profit of $66.54 million.
Based on the recent corporate insider activity of 33 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SBH in relation to earlier this year.
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Sally Beauty Holdings, Inc. is an international retailer and distributor of professional beauty supplies. It operates through the Sally Beauty Supply and Beauty Systems Group segments.
