Citi Trends price target raised to $40 from $29 at DA Davidson

DA Davidson raised the firm’s price target on Citi Trends (CTRN) to $40 from $29 and keeps a Buy rating on the shares. The key to the potential upside in Citi Trends is comp impact of continuing to add more extreme value closeout product to drive comp and the associated margin flow through on those additional sales, which are higher margin, against a relatively stable cost base, the analyst tells investors in a research note. The firm added that, in its base case, that dynamic drives EBITDA of $44M by 2027, up from a loss of $8M over the past twelve months. DA also noted that its higher price target is based on 7x its 2027 EBITDA estimate, though it can get nearly double in its bull case.