2023-03-24 13:19:05 ET
The sell-side still sees upside for Oxford Industries ( NYSE: OXM ) despite a deep decline for the stock following its Q4 print.
Shares of the Tommy Bahama parent tumbled 13.25% in afternoon trading on Friday after reporting a mixed earnings result on Thursday evening. In particular, a below-consensus profit forecast and elevated inventory levels , coupled with plans to “aggressively” invest in employees and operations appeared to drive downside pressure.
However, analysts at both Keybanc and Piper Sandler indicated the deep drop is unwarranted, creating a buying opportunity for investors on Friday. In fact, Piper Sandler analysts Edward Yruma and Abbie Zvejnieks reiterated their selection of Oxford as a top idea for 2023.
“We think valuation remains attractive given the strong growth opportunity,” the duo advised. “We are generally cautious on the high-end consumer given volatile equity markets and increased layoffs, but leisure travel trends look supportive this year. Moreover, we think that OXM’s stronger organic growth profile can drive multiple expansion over time. OXM and TGT remain our top two ideas for 2023.”
The team assigned a $135 price target to the stock alongside an Outperform rating. Keybanc analyst Noah Zatzkin largely concurred, adding that investments weighing on the outlook are likely prudent.
“OXM continues to buck the trend in Apparel and LT we continue to see meaningful opportunity from Tommy, Lilly, and Johnny Was, as well as the potential for outsized growth from OXM's Emerging Brands,” he told clients. “As a result, we reiterate [Overweight rating] and our $130 price target.”
Read the earnings call transcript .
For further details see:
Analysts defend Oxford Industries amid post-earnings plunge