About two weeks prior to an investor meeting at the close of November, Baird is moving tot he sidelines on Leslie’s ( NASDAQ: LESL ).
The firm’s analysts explained that increasing sales in the space as well as concerns on consumer belt tightening prompted the move from Outperform to Neutral. Additionally, price increases that have buoyed earnings power are expected to abate in the coming quarters.
“In short, while we remain bullish on the relative resilience of the aftermarket pool supplies sector and LESL's longer-term growth prospects, our updated gross margin/interest expense assumptions take our FY23 EPS estimate to $0.92 (~8% below the Street),” equity analyst Peter Benedict wrote on Tuesday. “With promotional activity picking up and steep inflation compares looming, we believe a more cautious near-term stance is warranted.”
He added that an over 25% jump for the stock since the start of November also augments the risk/reward dynamics for the stock. Benedict cut his price target to $16 from $18 alongside the downgrade.
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Leslie’s downgraded at Baird ahead of investor meeting