William Blair analyst Ryan Merkel has maintained their neutral stance on LESL stock, giving a Hold rating on April 25.
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Ryan Merkel has given his Hold rating due to a combination of factors impacting Leslie’s current performance and future outlook. The company experienced a top-line miss primarily due to unfavorable weather conditions, which affected customer traffic in the early months of the year. Despite this, Leslie’s managed to keep its adjusted EBITDA within the guidance range, and there was notable improvement in Pro growth compared to the previous year.
Looking forward, while the company’s strategic initiatives such as the operational local fulfillment centers and enhancements in its loyalty program show promise, there are still concerns. The need for significant debt reduction, a turnaround in the pool market, and better execution are critical for a more positive outlook. Additionally, although cost optimization strategies have been identified, their benefits are expected to materialize only in the longer term. Therefore, Merkel remains cautious and maintains a Hold rating.
Merkel covers the Industrials sector, focusing on stocks such as Aaon, Beacon Roofing Supply, and Fastenal Company. According to TipRanks, Merkel has an average return of 9.2% and a 60.95% success rate on recommended stocks.
In another report released on April 25, Stifel Nicolaus also upgraded the stock to a Hold with a $0.55 price target.