Caesars Entertainment misses Q2 earnings expectations, shares edge lower
On Tuesday, Truist Securities adjusted its outlook on OneSpaWorld Holdings Ltd. (NASDAQ: NASDAQ:OSW), reducing the price target to $19.00 from the previous $22.00 while keeping a Buy rating on the stock. According to InvestingPro data, the company’s stock is currently trading below its Fair Value, despite showing a strong 36.6% return over the past year. The revision arrives ahead of the company’s earnings report expected later in the week, with analyst Gregory Miller citing potential challenges for the wellness services provider. InvestingPro analysis reveals that two analysts have recently revised their earnings expectations downward for the upcoming period.
Miller pointed to anticipated decreases in discretionary spending by cruise and destination resort visitors at OneSpaWorld facilities, particularly looking towards the latter half of 2025 and into 2026. Despite these concerns, the firm’s current models do not predict a global financial crisis-level earnings drop of around 10%, thanks to several factors. These include the ongoing secular growth in wellness, the appeal of improved wellness facilities onboard cruise ships, the utilization of big data and pre-booking tools, and the minimal impact of "wealth effect" issues on affluent customers’ employment, housing values, and retirement funds. The company’s financial health appears solid, with InvestingPro data showing a healthy current ratio of 2.03 and moderate debt levels, suggesting resilience against potential market headwinds.
However, Miller also highlighted several uncertainties facing OneSpaWorld. Key among these are the demand for Medi-Spa services, the spending habits of the middle class, the extent of discounting and package deals offered, and the volume of cruise bookings for 2026. These unknowns contribute to the difficulty in projecting the company’s future performance.
The adjustment in price target reflects these mixed indicators, with Truist acknowledging both the potential headwinds and the resilience factors that could influence OneSpaWorld’s earnings. The firm’s decision to maintain a Buy rating suggests a belief in the company’s underlying strengths despite the anticipated challenges. InvestingPro subscribers can access over 30 additional financial metrics and insights about OSW, including detailed profitability analysis showing a 12.7% revenue growth in the last twelve months and an impressive Piotroski Score of 8, indicating strong financial position.
OneSpaWorld Holdings Ltd. specializes in health and wellness services for guests at cruise ships and destination resorts. With the upcoming earnings report, investors will be watching closely to see how the company is navigating the current economic environment and preparing for the future uncertainties outlined by Truist Securities.
In other recent news, OneSpaWorld Holdings Ltd. reported its fourth-quarter earnings for 2024, with revenues reaching $217.2 million, surpassing the expected $212.66 million. However, the company’s earnings per share (EPS) slightly missed expectations, coming in at $0.20 compared to the forecasted $0.21. Despite the revenue beat, the company’s stock experienced a decline. Loop Capital Markets recently raised OneSpaWorld’s stock price target to $24 from $20, maintaining a Buy rating, reflecting confidence in the company’s business model and financial management. On the other hand, Stifel adjusted their price target for OneSpaWorld to $21 from $25, while still recommending a Buy rating, indicating potential resilience in challenging market conditions. Loop Capital highlighted OneSpaWorld’s financial health improvements, noting a reduction in total debt below $100 million and a $4 million dividend payout in the fourth quarter. The company anticipates total revenue for 2025 to range between $950 million and $970 million, with plans to open health centers on nine new ship builds.
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