PowerA Leads the Way. PowerA continues to post strong performance, even in the face of constrained console availability due to the chip shortage. While console availability constrained 2Q21 sales, at $50.7 million sales still were in management's forecast range. We continue to expect a strong second half for PowerA.Operating Environment Trending Positive. The overall operating environment continues to trend in a positive manner, although there remain some potential hiccups. The commercial business continues to improve with the return to the office of workers, worldwide economies are improving, and school instruction looks like it will return to in-classroom instruction. Commodity inflation and logistics remain the biggest concerns, in our view.Well Positioned to Capitalize on Potential Upside. We believe ACCO is well positioned to capitalize on any potential upside. The Company's local manufacturing provides an edge against ongoing logistics issues, especially if back-to-school demand increases, and pre-ordering of chips positions the Company to capitalize on expected strong console demand during 2H21. Updated Projections. With increased 2H21 visibility, management is projecting record sales and strong profit for 2021. We are projecting 3Q21 revenue of $525 million, up from our prior $500 million estimate, and adjusted EPS of $0.36, level with our prior estimate reflecting margin pressure due to inflation and logistics costs. For the full year, we now expect revenue of $1.99 billion, reported EPS of $0.88, and adjusted EPS of $1.36.Maintain Outperform. We are maintaining our Outperform rating on ACCO shares and our 12-month price target of $12.00. At our $12.00 target, ACCO shares would trade at 8.8x our 2021 adjusted EPS estimate, 1.2x on an EV/Sales basis, and 7.9x on an EV/EBITDA estimate. And investors can enjoy a 3% dividend yield while waiting for a full return to normalcy to pan out. Read More >>