Leslie’s stock price target lowered to $0.35 from $0.65 at Jefferies

Investing.com - Jefferies has reduced its price target on Leslie’s (NASDAQ:LESL) to $0.35 from $0.65 while maintaining a Hold rating on the stock. The company’s shares currently trade at $0.36, near its 52-week low of $0.34, with InvestingPro data showing the stock appears undervalued based on its Fair Value analysis.

The firm cited Leslie’s recent preannouncement which indicated challenges in the company’s fiscal third quarter. According to Jefferies, Leslie’s fiscal 2025 will end with approximately 4.5% EBITDA margins, significantly lower than its peak of over 20% and pre-COVID levels of approximately 17%. Current EBITDA stands at $80.19 million, with revenue declining 6.12% over the last twelve months. InvestingPro analysis reveals 13 additional key metrics and insights available for subscribers.

Jefferies noted that challenging weather conditions this year should create easier year-over-year comparisons for fiscal 2026. The firm also pointed to potential fixed-cost reductions that could help trim what it described as a "bloated SG&A budget" and improve profitability.

Despite these potential improvements, Jefferies cautioned that intensifying competitive pressures will limit the magnitude of EPS recovery for Leslie’s.

The firm indicated these competitive factors would also constrain potential multiple expansion for the pool supplies retailer’s stock.

In other recent news, Leslie’s Inc. reported its Q2 2025 earnings, which fell short of analyst expectations. The company posted earnings per share (EPS) of $0.20, missing the forecasted $0.35. Additionally, revenue came in at $500.35 million, below the anticipated $564.81 million. These disappointing results follow a 12.4% decline in comparable sales and an approximately 25% year-over-year drop in adjusted EBITDA, as pre-announced for the third quarter of fiscal 2025. Telsey Advisory Group responded by lowering its price target for Leslie’s to $0.35 from $0.75, while maintaining a Market Perform rating. Despite the earnings miss, Leslie’s stock experienced a 4% rise in after-hours trading, indicating complex investor sentiment.

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