On Tuesday, Jefferies analyst Corey Tarlowe revised the price target for Guess (NYSE:GES) shares, reducing it to $14 from the previous $16 while maintaining a Hold rating on the stock. The adjustment follows recent discussions with the company's management during a fireside chat at the ICR Conference.
According to InvestingPro data, the stock is currently trading near its 52-week low of $12.90, with analysis suggesting the shares may be undervalued at current levels.
Tarlowe acknowledged Guess as a robust global brand but pointed out that the retail sector in North America continues to face challenges. Despite these difficulties, the company has found some support through its wholesale operations in the Americas, which have benefited from the acquisition of rag & bone. Additionally, the off-price segment has shown more favorable trends.
Despite these positive aspects, the analyst expressed a cautious stance, emphasizing the need for an upward trend in earnings revisions to firmly establish a bottom line for the company. The reaffirmed Hold rating reflects this conservative outlook, coupled with the lowered price target to $14, signaling a tempered expectation for Guess's stock performance in the near term.
Guess has been navigating a retail environment that has seen varying degrees of pressure across different segments. While wholesale operations and strategic acquisitions have provided some relief, the overall sentiment remains one of prudence, as indicated by the latest price target adjustment from Jefferies.
In other recent news, Guess Inc. encountered a challenging third quarter, marked by a downward revision of its stock by Telsey Advisory Group due to macroeconomic pressures and disappointing sales figures. Despite these obstacles, the company reported a 13% increase in Q3 revenue to $739 million, largely due to the acquisition of the Rag and Bone brand. However, decreased store traffic and changing consumer spending patterns in North American and Asian retail markets posed significant hurdles.
Telsey Advisory Group has maintained a Market Perform rating on Guess's stock, suggesting a neutral stance on its potential performance relative to the market. The analyst's cautious outlook reflects the company's ongoing struggles, despite its efforts in marketing and brand expansion.
In response to these developments, Guess revised its full-year revenue guidance to 7-8% growth and adjusted its EPS outlook to $1.85-$2.00. The company continues to invest significantly in marketing and expanding the Rag and Bone brand. Despite a mixed regional performance and cautious expectations, CEO Carlos Alberini expressed confidence in the company's long-term growth and the potential of new brand initiatives.
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