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Wednesday, Superior Uniform Group (NASDAQ:SGC) saw its price target reduced by DA Davidson from $24.00 to $20.00, while the firm sustained a Buy rating on the company’s shares. The adjustment followed Superior Uniform Group’s report of a slight miss on both revenue and earnings for the fourth quarter. The company’s performance was consistent with its full-year guidance. According to InvestingPro data, SGC appears undervalued, with shares trading at a modest P/E ratio of 13.78x and offering a substantial 4.11% dividend yield. The company has maintained dividend payments for an impressive 49 consecutive years.
According to DA Davidson, Superior Uniform Group’s sales outlook for 2025 falls within consensus estimates but is considered modest due to the renewed uncertainty in macroeconomic forecasts. The company has also projected lower profits as it plans to increase investment in marketing and sales throughout 2025. These investments are expected to yield benefits in the long term. InvestingPro analysis shows the company maintains a strong financial health score of GOOD, with liquid assets exceeding short-term obligations and a healthy current ratio of 2.86x.
Despite the reduction in the price target, DA Davidson reiterated its Buy rating for Superior Uniform Group. The new target is based on a 10x multiple of the firm’s estimated EBITDA for 2026. The decision to maintain the Buy rating indicates the firm’s continued positive outlook on the company’s stock.
Additionally, Superior Uniform Group reported some positive developments in the fourth quarter. These include the completion of a small acquisition and the announcement of a new $17.5 million stock buyback authorization. These strategic moves are anticipated to contribute to the company’s future growth and shareholder value.
DA Davidson’s lowered price target reflects a cautious but optimistic stance, acknowledging the challenges faced by Superior Uniform Group while also recognizing the company’s potential for future growth. The investment firm’s analysis suggests that the company’s strategic investments in 2025 are likely to pay off in the longer term, despite the current economic uncertainties.
In other recent news, Superior Uniform Group Inc. reported its fourth-quarter earnings for 2024, which showed a slight miss in both earnings per share (EPS) and revenue compared to analyst expectations. The company posted an EPS of $0.13, falling short of the forecasted $0.17, while revenue came in at $145.4 million, just below the anticipated $146.53 million. Despite these results, the company experienced a significant full-year growth with consolidated revenue and diluted EPS increasing by 435% year-over-year. Looking ahead, Superior Uniform provided an optimistic outlook for 2025, projecting revenue growth of up to 5% and EPS growth of up to 12%. The company continues to focus on strategic investments, including share repurchases and supply chain diversification. Additionally, Superior Uniform completed a small acquisition in the branded products sector, which is expected to contribute to growth in 2025. Furthermore, the company announced a new $17.5 million share repurchase plan, reflecting confidence in its financial position and future cash flow.
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