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On Monday, Telsey Advisory Group adjusted its outlook on Oxford Industries (NYSE:OXM) shares, reducing the price target to $68 from the previous $86, while maintaining a Market Perform rating. The firm’s analyst noted that Oxford Industries’ sales trends have aligned with expectations set during the ICR conference, despite the company having to temper its FY24 outlook multiple times. According to InvestingPro data, the stock currently trades at a P/E ratio of 62.9x, with analysis suggesting the company is currently overvalued relative to its Fair Value.
Management at Oxford Industries expressed a cautiously optimistic view regarding the FY25 trends and opportunities. The firm took positive note of the company’s recovery from recent hurricane disruptions, which had previously impacted earnings projections, and the passing of the election period. The analyst observed that consumer behavior remains focused on value and responsiveness to new fashion, though interest in core styles has waned. InvestingPro analysis highlights the company’s impressive gross profit margins of 62.6% and its remarkable 55-year streak of maintaining dividend payments, demonstrating long-term financial resilience.
Oxford Industries’ ongoing investments in stores, distribution, and brand development were highlighted as beneficial for the company’s long-term growth. However, the analyst pointed out that the current uncertain market environment poses challenges to short-term profitability, as evidenced by downward earnings revisions in each of the past three quarters. InvestingPro data reveals the stock has declined 30% over the past six months, though the company maintains strong cash flows sufficient to cover interest payments. Subscribers can access 8 additional ProTips and comprehensive financial analysis in the Pro Research Report.
The new price target of $68 reflects a 9.1 times multiple on the two-year forward earnings per share (EPS) estimate of $7.51. This is a shift from the one-year next twelve months (NTM) average multiple of 10.6 times and the recent NTM multiple of 8.9 times. The adjustment in the price target and the reiterated Market Perform rating indicate a cautious stance on the near-term earnings visibility for Oxford Industries, with the company’s market capitalization currently standing at $944 million and expected EPS of $6.62 for fiscal year 2025.
In other recent news, Oxford Industries has been the focus of several analyst updates following its latest financial disclosures. UBS analysts have lowered their price target for the company to $66, maintaining a Neutral rating, due to anticipated challenges in the fourth quarter and a cautious outlook for fiscal year 2025. They predict a potential miss in fourth-quarter earnings per share and expect the company’s full-year guidance to fall below consensus estimates. KeyBanc Capital Markets also adjusted their outlook, reducing the price target to $80 while keeping an Overweight rating, reflecting concerns about a conservative guidance amid a challenging retail environment. Despite these concerns, KeyBanc maintains a positive long-term view on the stock.
Citi has reiterated its Sell rating on Oxford Industries, with a price target of $65, noting that the company’s fourth-quarter sales and earnings per share are expected to align with previous forecasts. The company has projected a 2-7% decrease in sales and an EPS range of $1.18-1.38, which aligns with consensus estimates. Citi analysts have expressed skepticism about Oxford Industries’ ability to achieve its growth objectives in 2025, particularly in terms of increasing sales and margins. These recent developments highlight the cautious sentiment among analysts as Oxford Industries navigates a challenging market landscape.
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