Interactive Brokers shares jump as it secures spot in S&P 500
On Wednesday, Stifel analysts revised their outlook on Vestis Corp (NYSE:VSTS), a $1.4 billion market cap company currently trading at $10.20, lowering the price target from $15.00 to $13.00 while retaining a Hold rating on the stock. According to InvestingPro analysis, the stock appears undervalued at current levels. The adjustment follows news of the company’s CEO departure and the appointment of the Chairman as interim CEO while the Board searches for a permanent replacement.
The firm’s analysts noted the lack of public relations discussion about the company’s future, which they believe does not instill confidence in investors. This sentiment is reflected in the stock’s performance, which has declined 28% year-to-date. They also pointed out the recent addition of a new CFO just one month ago. Stifel’s analysts expressed concern about the challenges Vestis faces in executing a successful turnaround, suggesting that such efforts might be more effectively pursued privately.
Vestis Corp was reportedly on the market for sale, but according to Stifel’s analysts, interest from potential buyers did not meet the Board’s expectations. They also mentioned that the situation could change in October due to the resolution of certain tax complications related to a spin-off.
The reduction in the price target reflects both the current market environment and the anticipated negative sentiment towards Vestis stock. Despite trading at a high P/E ratio of 187x, the company maintains strong liquidity with a current ratio of 1.8. Moreover, Stifel’s analysts believe that the time required to turn the business around will be longer than previously expected, which has been factored into the new price target. For deeper insights into Vestis’s valuation and 12 additional ProTips, visit InvestingPro.
In other recent news, Vestis Corporation announced its first-quarter 2025 earnings, which did not meet analyst expectations for both earnings per share (EPS) and revenue. The company reported an EPS of $0.14, falling short of the projected $0.22, with revenue reaching $684 million, below the anticipated $724.72 million. Despite these results, Vestis maintained its full-year revenue guidance of $2.8 to $2.83 billion and adjusted EBITDA between $345 million and $360 million. In a significant leadership shift, Phillip Holloman was appointed as interim Executive Chairman, President, and CEO following Kim Scott’s resignation. The company has engaged an executive search firm to find a permanent CEO, while Doug Pertz will serve as Lead Director during this interim period. Analyst Andrew Steinerman from JPMorgan adjusted the price target for Vestis to $14.00 from $16.00, maintaining a Neutral rating. Steinerman noted management’s confidence in the company’s growth trajectory despite the leadership change. Vestis has also announced key executive changes, including a new Chief Legal Officer and CFO, which are part of the company’s ongoing efforts to optimize operations and improve customer experience.
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