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Investing.com - Telsey Advisory Group reduced its price target on Ethan Allen Interiors, Inc. (NYSE:ETD) to $28.00 from $30.00 on Thursday, while maintaining its Market Perform rating on the furniture retailer’s stock. The new target sits just above ETD’s current price of $27.19, with InvestingPro data suggesting the stock may be undervalued.
The price target adjustment reflects mounting pressures on the company’s profitability stemming from rising product costs, increased tariffs, and ongoing marketing investments aimed at driving traffic to its design centers. Despite these challenges, ETD maintains impressive gross profit margins of 60.54%.
Telsey noted that while demand at Ethan Allen’s showrooms is showing signs of improvement, the company continues to face challenges in its contract business segment.
The revised price target is based on a price-to-earnings multiple of approximately 15x applied to Telsey’s fiscal year 2027 earnings per share estimate of $1.85, which was lowered from a previous estimate of $2.20. For comparison, ETD’s current P/E ratio stands at 13.49.
Telsey’s valuation multiple for Ethan Allen increased from 13.5x previously, partially offsetting the impact of the reduced earnings forecast on the overall price target. InvestingPro data shows ETD offers a substantial 6.66% dividend yield, potentially appealing to income-focused investors despite growth challenges. The company’s comprehensive Pro Research Report is available for subscribers seeking deeper analysis.
In other recent news, Ethan Allen Interiors Inc. announced its financial results for the first quarter of fiscal year 2026. The company reported earnings per share of $0.43, which did not meet analyst expectations of $0.45. Revenue for the quarter was $147 million, slightly under the forecasted $148.6 million. These results represent a shortfall in both earnings and revenue against analyst projections. The company’s performance in this quarter reflects a modest deviation from what was anticipated by market analysts. Despite the earnings miss, there has been no mention of any changes in analyst ratings for the company. These developments are the latest in a series of financial updates from Ethan Allen Interiors.
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