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UBS lowered its price target on Oxford Industries (NYSE:OXM) stock to $48.00 from $56.00 on Friday, while maintaining its Neutral rating on the apparel company. The stock, currently trading near its 52-week low of $42.12, appears undervalued according to InvestingPro analysis, despite falling over 56% in the past year.
The price target reduction follows Oxford’s first-quarter report, which UBS said indicates the company’s fundamentals "remain under pressure." The firm cited ongoing topline challenges and margin compression as factors likely to weigh on Oxford’s earnings per share growth. InvestingPro data shows the company maintains impressive gross profit margins of 62.76%, though four analysts have recently revised their earnings estimates downward.
UBS analyst Mauricio Serna specifically highlighted concerns about tariffs, noting they "will have a larger than previously anticipated impact on OXM’s margins." This assessment led the firm to reduce its earnings per share estimates for fiscal years 2025 through 2027.
Despite these near-term challenges, UBS acknowledged that Oxford Industries has "a decent portfolio of lifestyle brands capable of delivering LT sales and EPS growth." Oxford’s brand portfolio includes Tommy Bahama, Lilly Pulitzer, and Johnny Was.
The firm maintained its Neutral stance on Oxford stock, stating it sees "more compelling opportunities" elsewhere in its softlines coverage universe and expects the identified challenges to "prevent stock outperformance over the NTM."
In other recent news, Oxford Industries reported its first-quarter fiscal 2025 earnings, revealing a decline in earnings per share (EPS) to $1.82, missing the forecasted $1.98. Despite this, the company’s revenue exceeded expectations, reaching $393 million against a forecast of $383.54 million. Oxford Industries has adjusted its fiscal 2025 earnings guidance to $2.80-3.20 per share, down from the previous $4.60-5.00, primarily due to increased tariffs. The company is heavily exposed to tariffs, with approximately 40% of its sourcing coming from China as of the end of fiscal 2024. Citi has responded to these developments by lowering its price target for Oxford Industries to $44 from $47, maintaining a Sell rating on the stock. The company faces significant challenges, including a difficult macroeconomic environment and increased capital expenditures, which could pose risks if sales continue to slow. Despite these hurdles, Oxford Industries is working on mitigating the impact of tariffs and is focused on supply chain diversification.
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