Oppenheimer Reiterates a Hold Rating on FossilBy Carrie Williams
“While pivoting into wearables could be the only option (traditional watches down double-digits while wearables up double-digits), competition is growing quickly, in a market driven by “vendor push rather than consumer demand” (per IDC). FOSL’s wearables reached $170M in ’16 (6% of total sales); guidance for ’17 already implies wearables tripling; cannibalization is a new risk (as company adds ~300 wearables’ SKUs in 2H17). Valuation looks inexpensive on EV/sales (0.4x, group at 1.2x); margin uncertainty (losing money on GAAP basis) could pressure FOSL’s 21x EV/EBITDA multiple (priciest in our coverage).”
According to TipRanks.com, Andreeva is a 3-star analyst with an average return of 2.1% and a 45.2% success rate. Andreeva covers the Services sector, focusing on stocks such as Ascena Retail Group, Abercrombie Fitch, and Children’s Place.
Currently, the analyst consensus on Fossil is Hold and the average price target is $30, representing a 79.1% upside.
In a report released yesterday, Jefferies also reiterated a Hold rating on the stock with a $19 price target.
Based on Fossil’s latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $959 million and quarterly net profit of $49.7 million. In comparison, last year the company earned revenue of $993 million and had a net profit of $70.4 million.
Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FOSL in relation to earlier this year. Most recently, in December 2016, Elaine Agather, a Director at FOSL sold 1,800 shares for a total of $57,168.
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Fossil Group, Inc. designs, markets and distributes consumer fashion accessories. Its products include men’s and women’s fashion watches, jewelry, handbags, small leather goods, belts, sunglasses, shoes, soft accessories and clothing which are sold through department stores, specialty retail locations, specialty watch and jewelry stores, owned retail and factory outlet stores, mass market stores, owned, and affiliate internet sites. It operates through the following segments: Americas, Europe, and Asia. The Americas segment includes sales to customers based in Canada, Latin America, and the United States. The Europe segment comprises of sales to customers based in European countries, the Middle East, and Africa. The Asia segment consists of sales to customers based in Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan, and Thailand. The company was founded by Tom Kartsotis in 1984 and is headquartered in Richardson, TX.