Morgan Stanley analyst Simeon Gutman maintained a Hold rating on National Vision Holdings today and set a price target of $26.00.
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Simeon Gutman has given his Hold rating due to a combination of factors that reflect both potential and uncertainty in National Vision Holdings’ future performance. The company has set ambitious goals for margin expansion and sales growth, driven by strategic initiatives such as targeting underdeveloped customer segments and enhancing customer experience. However, these initiatives are still in the early stages, and there is limited visibility on the company’s ability to significantly increase traffic, which is crucial for a successful transformation.
While the long-term outlook includes promising targets like high single-digit sales growth and annual EBIT margin expansion, the execution risks remain high. The company’s historical performance shows relatively flat EBIT margins, and the expected improvements hinge on cost management and SG&A leverage, which might be challenging to sustain given current traffic trends. The risk/reward profile is wide, with potential upsides and downsides, but the lack of clear visibility on achieving these targets keeps the recommendation at Hold.
According to TipRanks, Gutman is a 4-star analyst with an average return of 3.9% and a 59.27% success rate. Gutman covers the Consumer Cyclical sector, focusing on stocks such as Dick’s Sporting Goods, AutoZone, and Lowe’s.
In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $27.00 price target.