Street Calls of the Week
Investing.com - UBS has lowered its price target on Helen of Troy (NASDAQ:HELE) to $25.00 from $27.00 while maintaining a Neutral rating on the consumer products company. The stock, currently trading at $20.71, sits near its 52-week low of $20.02, having lost over 65% year-to-date. According to InvestingPro analysis, the company appears undervalued at its current market capitalization of $475 million.
The price target reduction follows Helen of Troy’s second-quarter earnings report, which showed stronger-than-expected sales growth but weaker gross margin and operating profit margin performance than anticipated. InvestingPro data reveals the company’s gross profit margin stands at 47.6%, while revenue has declined 4.35% over the last twelve months.
Helen of Troy also issued third-quarter and fiscal year 2026 guidance that fell short of Wall Street’s bottom-line expectations, contributing to a significant 25% drop in the company’s share price on the day of the announcement.
UBS noted that while the stock decline was more substantial than expected given its year-to-date performance prior to the earnings release, it wasn’t surprising considering the double-digit downward revision to earnings estimates and commentary about potential amendments to debt covenants.
The investment firm believes investors will likely remain cautious until there is greater clarity around execution, margin stabilization, and a path toward sustainable growth, despite the stock’s attractive valuation on both absolute and relative bases.
In other recent news, Helen of Troy Ltd reported its financial results for the second quarter of fiscal year 2026, showcasing notable earnings and revenue outcomes. The company achieved an adjusted earnings per share (EPS) of $0.59, exceeding the forecasted $0.53. Additionally, Helen of Troy’s revenue reached $431.8 million, surpassing the expected $416.78 million. Despite these positive figures, the market reacted negatively, as indicated by a significant drop in the company’s stock. The reasons for this negative market reaction were not detailed but may involve other factors discussed during the earnings call. These developments provide investors with crucial insights into the company’s recent performance.
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