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Lands' End (NASDAQ:LE) is extending its winning streak to a fifth consecutive day and set a 16-month high on Thursday with the latest gains fueled by better-than-expected Q4 results on Wednesday and expectations that the retailer has “turned a corner.”
Since Craig Hallum analyst Alex Fuhrman downgraded the stock to Hold two years ago, market fundamentals have improved to the benefit of Lands' End (LE). Interest rates – and interest expense – will likely fall, recession-risk is dimming, and the company’s EBITDA is rising.
Accordingly, Fuhrman has upgraded Lands’ End (LE) to Buy as the company’s strategic changes appear to be yielding “significant results” and “substantially higher gross margins” as recent initiatives bear fruit. The firm also hiked its price target by 67% to $15.
Lower interest expense should result in savings of $40M this year from $48M last year, and taken together, Craig-Hallum forecasts $23M in free cash flow in calendar year 2024, more than double the firm’s prior expectations.
The firm still expects Lands’ End (LE) to report a loss in Q1 2024 but raised its EPS outlook for 2025 to a profit of $0.14 versus the initial estimate for a loss of $0.08 and for a profit of $0.41 in FY26.
More on Lands' End
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Lands' End (LE) shares are up 11.5% on Thursday.
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