Synovus Financial weighs merger options after drawing interest - Bloomberg
On Thursday, Jefferies analyst Bret Jordan adjusted the price target for Monro Muffler Brake Inc. (NASDAQ:MNRO), a leading automotive service provider, to $18.00 from the previous $22.00, while maintaining a Hold rating on the stock. According to InvestingPro data, five analysts have recently revised their earnings estimates downward for the upcoming period. The revision followed the company’s fourth-quarter adjusted earnings per share (EPS) report, which showed a loss of $0.09, falling short of the consensus estimate of a $0.03 gain. The stock, currently trading at $16.75, appears undervalued based on InvestingPro’s Fair Value analysis.
The company’s gross margin declined by 250 basis points year-over-year to 35.56%, impacted by increased labor costs and a shift in product mix. Despite these challenges, Monro reported a comparable store sales increase of 2.8%, surpassing the consensus expectation of a 0.2% increase. This performance was attributed to a rebound in sales momentum and a continuing positive trend in the current quarter-to-date, with a 7% rise. The stock has shown remarkable resilience with a 30.86% return over the past week, though it remains down 38.91% over the past six months.
Jefferies noted the strategic decision by Monro’s new management to close approximately 145 underperforming stores, which represents about 10% of the total store base but only approximately 5% of revenue. This move is expected to improve the company’s margins as 2026 progresses. Management anticipates year-over-year growth in adjusted EPS, although other sales and margin initiatives may take longer to demonstrate significant progress.
The company’s efforts to streamline operations and focus on profitability are part of a broader strategy to navigate the current economic pressures. Monro’s management team is working to position the company for improved financial performance in the coming years.
In other recent news, Monro, Inc. reported a challenging fourth quarter for 2025, missing analysts’ earnings expectations. The company posted an earnings per share (EPS) of -$0.09, falling short of the forecasted $0.03, and reported a net loss of $21.3 million compared to a profit of $3.7 million the previous year. Revenue for the quarter was $295 million, down 4.9% from the prior year, but slightly above the forecast of $288.58 million. Despite these results, Monro’s stock surged by 24.9% in premarket trading, possibly due to strategic operational changes and positive future guidance. The company announced plans to close 145 underperforming stores in the first quarter of fiscal year 2026, aiming to improve profitability. Comparable store sales increased by 2.8%, indicating some resilience amid the overall sales decline. Analysts from firms like Stephens and Wells Fargo (NYSE:WFC) are closely monitoring Monro’s strategic initiatives and their potential impact on future performance. Additionally, Monro has not provided specific financial guidance for fiscal 2026 due to uncertainties related to tariffs but anticipates year-over-year comparable store sales growth.
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