William Blair analyst Ryan Merkel has maintained their neutral stance on LESL stock, giving a Hold rating on July 26.
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Ryan Merkel has given his Hold rating due to a combination of factors impacting Leslie’s financial performance. The company faced significant challenges, including a substantial miss in third-quarter earnings per share and the withdrawal of full-year guidance, which has led to a sharp decline in stock value. This marks the third consecutive year of underperformance in the third quarter, driven by adverse weather conditions, reduced discretionary spending, and chemical price deflation, which were anticipated obstacles.
Despite these challenges, the extent of the sales shortfall, which was 12%, was unexpected. Additionally, Leslie’s is grappling with a heavy debt load, with a trailing net debt to EBITDA ratio of 13.8 times, which further exacerbates investor concerns. To improve its financial outlook, the company would need a positive shift in the pool market conditions. These factors collectively contribute to the Hold rating, as they reflect both the current difficulties and the potential for future improvement if market conditions change.
In another report released on July 26, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $0.50 price target.