Analysts Conflicted on These Services Names: Gap (NYSE: GPS), Tuesday Morning (NASDAQ: TUES) and Hoegh LNG Partners (NYSE: HMLP)

By Carrie Williams

Companies in the Services sector have received a lot of coverage today as analysts weigh in on Gap (GPSResearch Report), Tuesday Morning (TUESResearch Report) and Hoegh LNG Partners (HMLPResearch Report).

Gap (GPS)

In a report released today, Susan Anderson from B.Riley FBR reiterated a Hold rating on Gap, with a price target of $21. The company’s shares closed last Monday at $17.75, close to its 52-week low of $15.22.

Anderson commented:

“The Gap, Inc. (GPS) reported 2Q19 adj. EPS of $0.63, vs. B. –4% SSS (versus B. Riley FBR/consensus of –3.9%/–3.0%). Adj. GM deleveraged – 98 bps Y/Y (versus B. bps/–144 bps) and SGA delevered –43 bps (versus B. bps/–103 bps). Merchandising margins were down –70 bps Y/Y , driven primarily by Old Navy, partially offset by margin expansion at the Gap brand. Management reiterated 2019 EPS guidance of $2.05–$2.15 (versus B. Riley FBR/consensus of $2.05/$2.06). The company reiterated SSS guidance of –LSD (versus B. Riley FBR/consensus of – 2.9%/–1.9%). At the end of 2Q19, inventory was up +6% driven by the Janie and Jack acquisition, longer in-transit times, and net store growth Y/Y .”

According to TipRanks.com, Anderson is a 1-star analyst with an average return of -0.9% and a 39.9% success rate. Anderson covers the Consumer Goods sector, focusing on stocks such as Lululemon Athletica Inc, Turning Point Brands, and Columbia Sportswear.

Currently, the analyst consensus on Gap is a Hold with an average price target of $20.36, implying a 18.7% upside from current levels. In a report issued on August 13, Robert W. Baird also maintained a Hold rating on the stock with a $19 price target.

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Tuesday Morning (TUES)

B.Riley FBR analyst Jeff Van Sinderen maintained a Hold rating on Tuesday Morning today and set a price target of $1.80. The company’s shares closed last Monday at $1.47, close to its 52-week low of $1.25.

Van Sinderen observed:

“TUES reported 4Q19 BMO on 8/22. Sales/comps/GM/EBITDA/EPS exceeded expectations, as the company managed to drive transactions amid an environment of reduced ad events. Relo stores comped +48%. GM declined 10 bps, as freight costs continued to impact and there was a partial offset from improved IMU. SG&A deleveraged 70 bps, but was better than our estimate. As a result, EBITDA came in above our estimates and consensus. The shift to digital advertising is complete after three years of reducing traditional ad events. The company is making progress in digital marketing with over 3M email addresses in its database and is seeing positive results from using diversified media. Customer engagement, impressions, site traffic and social media followers along with KPIs across email subscribers increased for the year.”

According to TipRanks.com, Sinderen has 0 stars on 0-5 star ranking scale with an average return of -4.1% and a 41.0% success rate. Sinderen covers the Consumer Goods sector, focusing on stocks such as Universal Electronics, Celsius Holdings Inc, and Chromadex Corp.

Currently, the analyst consensus on Tuesday Morning is a Moderate Buy with an average price target of $2.85.

Hoegh LNG Partners (HMLP)

In a report released yesterday, Liam Burke from B.Riley FBR maintained a Buy rating on Hoegh LNG Partners, with a price target of $21. The company’s shares closed last Monday at $15.01, close to its 52-week low of $14.05.

Burke wrote:

“Hoegh LNG Partners LP (HMLP) reflect a 4.8% Y/Y time charter revenue decline ($33.8 million vs. $35.5 million). The company announced the 16 day off-hire of the Hoegh Gallant with accelerated timing to allow for the scheduled completion of drydock that reduced revenue for 2Q19. Consensus estimates were $34.9 million. Hoegh reported adjusted EBITDA of $31.0 million compared to $36.9 million a year ago. EBITDA results compare with consensus of $28.3 million. Distributable cash flow declined 26.7% Y/Y from the same period a year ago. The acceleration of the timing of maintenance procedures increased maintenance expenses by $3.0 million from a year ago. Distribution cash coverage ratio was 0.88x compared to 1.20x during 2Q18.”

According to TipRanks.com, Burke is ranked #4629 out of 5263 analysts.

Hoegh LNG Partners has an analyst consensus of Hold.

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