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Investing.com - Stifel lowered its price target on Lucky Strike Entertainment (NYSE:LUCK) stock to $12.00 from $13.00 on Friday, while maintaining its Buy rating on the entertainment company. The stock, currently trading at $9.93, has seen a notable 9.5% gain over the past week, though it remains down 26% over the past year according to InvestingPro data.
The firm cited significant headwinds in Lucky Strike’s events business over the past few quarters as a key reason for the adjustment, though it believes this segment is "close to bottoming." Stifel noted that when combined with "healthy retail/league trends," same-store sales could soon turn positive. InvestingPro data reveals the company operates with a significant debt burden, with a debt-to-capital ratio of 67% and current ratio of 0.64, indicating potential liquidity challenges.
Several potential catalysts in the second half of 2025 could improve investor sentiment, according to Stifel, including improvements to Lucky Strike’s season pass program, more targeted marketing efforts, pricing actions, and continued insider buying of company shares. Indeed, InvestingPro analysis shows management has been actively buying back shares, though the company’s financial health score remains fair at 2.22 out of 5. Get access to 6 more exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report.
The research firm acknowledged its "bullish view has been dead wrong" but maintained there remains "significant value for the patient investor" in Lucky Strike stock. Stifel described the company as "clearly a show me story" that "remains out of favor with the investment community."
Stifel also indicated it had lowered its estimates to incorporate "some conservatism" specifically regarding Lucky Strike’s California business operations.
In other recent news, Lucky Strike Entertainment reported its Q1 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.21, falling short of the $0.25 forecast, while revenue reached $339.9 million, below the expected $358.29 million. This performance marks a departure from previous quarters where the company typically met or exceeded projections. Truist Securities maintained its buy rating on Lucky Strike, citing improved consumer spending patterns and projecting earnings growth to accelerate in the coming year. However, Roth/MKM analysts downgraded the stock from Buy to Neutral, adjusting the price target to $9.00 from $13.00 due to prolonged fundamental challenges. The downgrade reflects concerns over the broader economic uncertainty that could continue to impact the company’s Corporate Events segment negatively. Despite these challenges, Lucky Strike is actively pursuing strategic initiatives such as food and beverage innovation and expanding entertainment offerings to drive growth. The company remains optimistic about improved performance in the upcoming summer months, particularly with strong sales of summer season passes.
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