2023-05-17 11:01:53 ET
Bank of America reiterated a positive view on Leslie's ( NASDAQ: LESL ) after hosting virtual investor meetings with the retailers' CEO and CFO earlier in the week.
The firm said it remains bullish on the outlook for the home improvement sector broadly, and pool maintenance demand more specifically. Leslie's ( LESL ) competitive position as the top retailer in the category is seen setting it apart.
Leslie's ( LESL ) management noted stated the company still have not seen signs of deflation in retail pricing, although modest softening is reflected in the recent guidance. BofA's view on LESL is that growth initiatives in place do not get the focus they deserve. Growth through new store expansion, M&A, product innovation, and customer file growth were noted to all still be on the table.
On the specific question of whether to acquire businesses or repurchase shares, Leslie's ( LESL ) said the mom and pop businesses it tends to buy come at valuations below LESL shares. Interestingly, there are about 8K independent pool supplies retailers with more than half of the industry’s market share for the company to look at.
Bank of America has as Buy rating on Leslie's ( LESL ) and price objective of $18, which works out to 18X the 2024 EPS estimate.
Shares of Leslie's ( LESL ) rose 4.77% in morning trading to land at $10.65, which is just off the bottom of the 52-week range of $10.06 to $20.30. The stock is down 13% on a year-to-date basis. Short interest on KNDI is at 11.5% of total float.
More on Leslie's:
- Leslie's Results Return To Pre-Pandemic Levels In Pool Industry Amid Inflation
- More articles from Seeking Alpha analysts
- Leslie's earnings call transcript
- Relative strength index and moving averages
- Seeking Alpha's Quant Rating for Leslie's
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Leslie's trades higher after BofA says growth initiatives look promising