Jefferies analyst Kyle Joseph sees the stark drop for Conn’s Inc. ( NASDAQ: CONN ) stock after the departure of its CEO as a solid opportunity for investors.
Shares of the retailer reeled following the announcement of CEO Chandra Holt ’s exit from the company as well as the trimming of third quarter guidance. The company now expects revenues to fall 21 to 23% year over year in its Q3 report while operating margin slides in the mid-single-digit range. Full year guidance was pulled altogether.
“Macro continues to be a major headwind for Conn’s ( CONN ) as inflation and the pull forward of demand as a result of COVID/stimulus weigh on the top-line,” Joseph acknowledged. “While we anticipate the challenging operating environment continuing, we continue to find value in shares at a 60%+ discount to TBV.”
As such, he reiterated a “Buy” rating and assigned the stock a $15 price target, suggesting the stock could more than double in the next twelve months. Conn’s ( CONN ) stock slumped 15.1% in afternoon trading on Tuesday, up significantly from about a 25% drop on the market open.
Read more on the stocks making the biggest moves on Tuesday .
For further details see:
Steep slide for Conn’s stock offers opportunity - Jefferies