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Jefferies initiated coverage on Signet Jewelers (NYSE:SIG) Monday with a buy rating and a $102.00 price target, citing the jewelry retailer’s ongoing transformation strategy. Currently trading at $76.49, InvestingPro analysis suggests the stock is currently undervalued based on its proprietary Fair Value model.
The research firm highlighted Signet’s position as a leading jewelry and watch retailer in North America with strong cash flow generation capabilities, evidenced by its impressive 13% free cash flow yield and $601.7M in EBITDA. Signet is currently undergoing a transformation under new leadership with its "Grow Brand Love" strategy.
This strategic initiative aims to simplify operations, enhance customer service, reduce costs, and focus on more profitable sales, according to Jefferies. The firm noted that while the turnaround effort remains in early stages, there are promising indicators that the strategy is gaining momentum.
Jefferies pointed to "encouraging signs" suggesting the transformation plan is showing positive results across the business. The firm emphasized that Signet’s current valuation "appears too attractive to overlook" given the company’s market position and improvement trajectory.
Signet Jewelers operates several well-known jewelry retail brands throughout North America and maintains substantial cash flow generation capabilities that support its ongoing strategic initiatives. InvestingPro data reveals the company’s strong financial health, with management actively buying back shares and maintaining dividend payments for 15 consecutive years. Discover 12 more exclusive insights with an InvestingPro subscription.
In other recent news, Signet Jewelers has seen a series of analyst upgrades and positive earnings developments. UBS raised its price target for Signet Jewelers to $95, citing the company’s strong first-quarter sales results and enhanced earnings per share guidance for fiscal year 2026. UBS analysts expect an 11% compound annual growth rate in earnings per share over the next five years. Citi also increased its price target to $100, driven by the company’s successful expansion in lab-grown diamond fashion offerings, which saw a 60% growth in the first quarter. Additionally, Citi maintained its Buy rating, noting the company’s robust first-quarter comparable sales that exceeded consensus estimates. The company adjusted its fiscal year 2025 guidance, raising the earnings per share forecast to between $7.70 and $9.38. UBS and Citi both highlighted the company’s strategic initiatives and resilience in managing tariff challenges. Investors are keenly awaiting further financial results and forward-looking statements from Signet Jewelers.
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