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On Thursday, Piper Sandler adjusted its price target for Inter Parfums (EPA:IPAR) stock (NASDAQ: NASDAQ:IPAR), reducing it to $138 from $169, while maintaining an Overweight rating. Currently trading at $107.66, the stock has seen a 17.61% decline year-to-date. The adjustment comes despite the company’s first-quarter sales surpassing expectations and its decision to uphold its current guidance. The fragrance market continues to demonstrate strength, and Inter Parfums is seen as well-positioned within the industry, with the ability to manage tariffs and consumer spending pressures effectively. InvestingPro data shows the company maintains a "GREAT" financial health score of 3.19, indicating robust operational stability.
The company’s agile supply chain and realistic estimates contribute to Piper Sandler’s continued support for the Overweight rating. According to InvestingPro, Inter Parfums boasts impressive gross profit margins of 55.74% and holds more cash than debt on its balance sheet, demonstrating strong financial management. The price target has been adjusted to reflect the current market conditions. The firm acknowledges the significant re-rating of shares and has consequently revised the target multiple to align with the market’s volatility.
Piper Sandler emphasizes Inter Parfums’ robust position in a still-vibrant fragrance market, with mechanisms in place to counteract tariff impacts, and guidance that remains sustainable in the face of macroeconomic uncertainties. The firm’s analysts believe that Inter Parfums’ stock, trading at less than 12 times the next twelve months (NTM) enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), compared to its peers, presents an opportunity for valuation expansion. This analysis aligns with InvestingPro’s comprehensive assessment, which reveals 12 additional key insights about the company’s performance and potential. Subscribers can access the full Pro Research Report for deep-dive analysis and expert insights.
The price target revision to $138 is based on nearly unchanged forward-looking estimates and a lower projected 2025 EV/EBITDA multiple of approximately 14 times, compared to the previous 18 times. This new target reflects Piper Sandler’s assessment of the company’s financial outlook and market dynamics. According to InvestingPro’s Fair Value analysis, Inter Parfums currently appears undervalued, supporting the positive outlook. Despite the lower price target, the firm’s outlook on Inter Parfums remains positive, with the Overweight rating reaffirmed.
In other recent news, Inter Parfums has reported fourth-quarter sales for 2024 that met expectations and exceeded earnings per share (EPS) projections. The company anticipates a mid-single digit growth for the industry, with an 11% increase in 2024, and has sustained its guidance for a 4% increase in sales for 2025. Inter Parfums has also acquired all worldwide intellectual property rights related to Maison Goutal, with plans to develop the brand further starting in 2026. Analysts from DA Davidson have maintained a Buy rating on the stock, raising the price target to $170, while Canaccord Genuity and Piper Sandler have also increased their price targets to $168 and $169, respectively, reflecting confidence in the company’s growth prospects. The firm’s financial health appears strong, with a reported free cash flow of approximately $180 million in 2024 and a 7% increase in dividends. Inter Parfums plans several new product launches and is increasing investments in advertising and promotion, which analysts believe could lead to upward revisions in guidance. Despite challenges in the prestige beauty industry, the company remains optimistic about achieving its FY25 guidance and continues to focus on brand-building strategies.
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