Analyst Simeon Gutman from Morgan Stanley maintained a Sell rating on European Wax Center (EWCZ – Research Report) and decreased the price target to $4.00 from $5.00.
Simeon Gutman has given his Sell rating due to a combination of factors affecting European Wax Center’s financial outlook. The company is facing significant challenges such as over-expansion, inadequate infrastructure, and ineffective marketing strategies. These issues are expected to lead to a reset year in 2025, with anticipated declines in revenue and adjusted EBITDA. Gutman notes that the company’s unit growth has been declining, and positive growth might not occur until the end of 2026.
Additionally, macroeconomic pressures are contributing to a decrease in transactions and lower engagement from new customers. Although European Wax Center is implementing strategic initiatives to boost its top-line, the benefits of these actions are unlikely to be realized until late 2025 or 2026. Gutman’s price target for the stock has been lowered to $4, reflecting a significant discount to its historical multiple, due to these ongoing challenges and the company’s muted growth outlook.
EWCZ’s price has also changed moderately for the past six months – from $6.700 to $4.450, which is a -33.58% drop .