On Monday, Jefferies updated its stance on Genesco Inc (NYSE:GCO), increasing the price target to $40 from the previous $27, while maintaining a Hold rating on the stock. The adjustment follows Genesco's third-quarter performance, which surpassed expectations in terms of sales, margins, and earnings per share (EPS). The stock, currently trading at $40.95, has shown remarkable momentum with a 57% gain over the past six months.
The company's retail chain, Journeys, reported double-digit percentage comparable store sales growth, while its e-commerce operations continued to show robust performance. The positive trend extended into the early holiday sales period. Genesco's management has responded to these outcomes by raising its fiscal year 2025 sales guidance and increasing the lower end of the FY EPS forecast. According to InvestingPro, while the company wasn't profitable in the last twelve months, analysts expect a return to profitability this year.
The analyst noted the effectiveness of Journeys' strategic growth plan, highlighting the brand's refreshed product lineup and visual redesign as key factors contributing to its current trajectory. Despite these positive developments, the analyst chose to maintain a Hold rating, suggesting a wait-and-see approach to the stock.
The price target increase to $40 reflects the analyst's recognition of Genesco's recent financial achievements and the potential for continued growth, as indicated by the company's optimistic guidance updates. This move by Jefferies provides investors with a revised benchmark for assessing Genesco's market value in light of the company's latest financial results and strategic initiatives.
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