William Blair analyst Jeff Schmitt has maintained their bullish stance on FTDR stock, giving a Buy rating on July 23.
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Jeff Schmitt has given his Buy rating due to a combination of factors that highlight Frontdoor’s strong financial performance and strategic initiatives. The company reported impressive second-quarter results, with adjusted earnings per share significantly surpassing both the firm’s and market expectations. A notable achievement was the record gross margin, which improved due to enhanced processes, strategic pricing, and a decrease in customer service requests, attributed to favorable weather conditions.
Additionally, Frontdoor experienced accelerated revenue growth, driven by pricing strategies and increased volumes, particularly from the successful 2-10 deal. The company also saw substantial growth in other revenue streams, thanks to initiatives like the HVAC discount and Moen programs, as well as the introduction of new home structural warranties. Furthermore, the company’s share buyback program and increased guidance for future buybacks reflect a strong commitment to returning value to shareholders. These factors collectively underscore Frontdoor’s ability to navigate a challenging housing market effectively, justifying the Buy rating.
In another report released on July 23, Truist Financial also maintained a Buy rating on the stock with a $67.00 price target.