Analyst Zachary Fadem from Wells Fargo maintained a Hold rating on National Vision Holdings and increased the price target to $27.00 from $24.00.
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Zachary Fadem has given his Hold rating due to a combination of factors influencing National Vision Holdings. Despite the company’s strong performance in the second quarter, which exceeded expectations with significant growth in comparable sales, EBIT, and EPS, there are concerns about the sustainability of this momentum. The company’s traffic figures have shown a decline, and there is an implied deceleration in the second half of the year, which suggests a cautious outlook.
Additionally, while the company’s initiatives in pricing and assortment appear to be effective, and there are potential benefits from CRM improvements, the current valuation at 32 times next twelve months’ P/E ratio and a modest EBIT margin of under 5% make the stock less attractive for aggressive buying. The stock has already seen a significant year-to-date increase, and Fadem suggests waiting for a more favorable entry point before considering a stronger investment stance.
According to TipRanks, Fadem is a 5-star analyst with an average return of 11.0% and a 63.00% success rate. Fadem covers the Consumer Cyclical sector, focusing on stocks such as O’Reilly Auto, Home Depot, and Wingstop.