Lakeland Industries will repurchase $5 million worth of its outstanding shares, the manufacturer of protective clothing announced on Feb. 17. The new share repurchase program will replace its previous share repurchase program that had about $800,000 remaining for repurchases.
Lakeland (LAKE) CEO Charles D. Roberson commented, “The Board’s approval of this new and substantially expanded repurchase program reflects its commitment to optimizing shareholder returns. Given the increase in our stock price to recent record levels, the $800,000 funding remaining in the previous program limited the potential of the program and our Board of Directors has proactively addressed the issue by approving this significantly larger program.”
The repurchased shares will be held as treasury stock and can be used for funding share issuances under employee stock plans approved by stockholders and other general corporate purposes.
Shares of LAKE were down by 3.6% in morning trading and have jumped more than 26% over the past month. (See Lakeland Industries stock analysis on TipRanks)
Around two months back, Roth Capital analyst Gerry Sweeney had raised the price target from $25 to $28 and reiterated a Buy rating on the stock. Sweeney said, “LAKE continues to manufacture fewer chemical and disposable SKUs [stock keeping units], aiding factory utilization. Moving forward, we expect revenue and margins to continue to benefit from COVID related demand through 2Q F2022.”
“As COVID fades, the risk of a period of inventory build and order volatility remains, but a rebound in the industrial markets should mitigate the severity,” the analyst summed up.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 analysts recommending a Buy. The average analyst price target of $31.50 implies about 12% downside potential to current levels.
According to the TipRanks Smart Score system, LAKE scores a 9 out of 10 indicating that the stock has a high likelihood of outperforming the market.
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