Credit Suisse Initiates a Buy Rating on Floor & Decor Holdings Inc

By Ryan Adsit

In a report issued on May 22, Seth Sigman from Credit Suisse initiated coverage with a Buy rating on Floor & Decor Holdings Inc (NYSE: FND) and a price target of $43. The company’s shares closed yesterday at $37.40.

Sigman observed:

“We view FND as a rare growth opportunity, with 20% annual store growth, above average industry growth trends, ample market share potential, far less e-commerce risk than other retail categories, and a superior management team. With the story relatively well understood, we focus on three areas. First, Support for FND’s 400+ Store Target: FND’s industry-leading assortment and everyday low-price proposition position it for significant share. Based on FND’s target market characteristics, our analysis validates the 400+ store target, with emphasis on Northeast and West Coast markets. Second, Comps Bridge Analysis Highlights Opportunities for Upside: We model comps of +8.6% in 2017 (vs. 19.4% in 2016). We see the potential for upside from (1) new store comps, for which we estimate a +6% contribution based on the pro forma model (vs. 11% last year), as well as (2) contribution from macro/company initiatives, for which we estimate a 5% contribution (vs. 10% last year).”

According to TipRanks.com, Sigman is a 1-star analyst with an average return of -3.3% and a 45.3% success rate. Sigman covers the Services sector, focusing on stocks such as Cinemark Holdings Inc, Dick’s Sporting Goods, and Container Store Group.

Floor & Decor Holdings Inc has an analyst consensus of Moderate Buy, with a price target consensus of $43.

The company has a one year high of $39.49 and a one year low of $29.37. Currently, Floor & Decor Holdings Inc has an average volume of 822.5K.

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Floor & Decor Holdings, Inc. engages in the retail of hard surface flooring and related accessories. The firm provides wood, stone, and flooring products. Its products includes vinyl, laminate, and tiles with materials installation for living rooms, kitchen, bathrooms, and walls. The company was founded by Vincent George West in 2000 and is headquartered in Smyrna, GA