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On Friday, UBS analyst Mauricio Serna adjusted the price target for Oxford Industries (NYSE:OXM), a company known for its portfolio of lifestyle brands, reducing it to $57.00 from the previous $66.00. Despite this change, the firm maintained a Neutral rating on the stock. According to InvestingPro data, the stock has fallen over 26% in the past six months, though analysis suggests it may be undervalued at current levels.
Serna expressed concerns regarding the company’s growth prospects, especially in the near-term (NTM). The analyst highlighted that while Oxford Industries has the potential for long-term sales and earnings per share (EPS) growth, the forecast for fiscal year 2025 (FY25) suggests that the company’s fundamentals might be struggling. This outlook prompted the reduction in the EPS estimates for FY25 through FY27. InvestingPro data shows the company maintains impressive gross profit margins of 62.6% and has a strong dividend history, having maintained payments for 55 consecutive years.
The revised guidance from Oxford Industries indicates that the company may face headwinds in terms of revenue and profit margins, which are expected to hinder EPS growth for FY25. Consequently, these challenges are likely to prevent the stock from outperforming in the near-term market.
UBS further noted that within the Softlines sector, there appear to be more attractive investment options available. The firm’s ongoing Neutral stance on Oxford Industries reflects this comparative assessment and suggests a cautious approach to the stock in light of the anticipated difficulties.
In other recent news, Oxford Industries reported its first fiscal quarter of 2025 earnings, revealing an earnings per share (EPS) of $1.13, which fell short of the $1.26 forecast by analysts. Despite the EPS miss, the company reported revenue of $390.51 million, slightly exceeding the anticipated $383.94 million. This mixed performance reflects ongoing challenges in the retail and apparel sectors. Citi analyst Paul Lejuez subsequently lowered the price target for Oxford Industries to $52 from $65, maintaining a Sell rating due to weak earnings guidance and macroeconomic challenges. KeyBanc Capital Markets also downgraded Oxford Industries’ stock from Overweight to Sector Weight, citing concerns over market softness and potential margin compression in 2025. The company’s guidance for fiscal year 2025 projects net sales between $1,490 million and $1,530 million, with an adjusted EPS forecast of $4.60 to $5.00, significantly lower than previous estimates. Tariffs and increased selling, general, and administrative expenses are expected to exert additional pressure on the company’s financial performance. Despite these hurdles, sales for brands like Tommy Bahama and Lilly Pulitzer are projected to be significantly higher than in fiscal year 2019, indicating potential areas of growth amidst the challenges.
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