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On Monday, UBS analyst Mauricio Serna adjusted the price target for Columbia Sportswear (NASDAQ:COLM) shares to $51.00, up from the previous $42.00, while continuing to recommend a Sell rating for the stock. With a current market capitalization of $3.8 billion and a P/E ratio of 17.6, Columbia maintains strong financial health, as indicated by InvestingPro data. Serna’s analysis suggests that although Columbia Sportswear experienced a solid first quarter, with an anticipated 2 cents earnings per share (EPS) beat, future financial projections may be affected by tariff-related challenges.
The analyst predicts that Columbia Sportswear will likely revise its full-year 2025 (FY25) EPS guidance downward by 30 to 40 cents due to these headwinds, setting more cautious expectations for the second half of 2025. This adjustment is expected to bring the company’s EPS guidance to a range below the initial $3.80 to $4.15 projection. Notably, InvestingPro analysis shows the company maintains a strong balance sheet with a healthy current ratio of 2.62 and has consistently paid dividends for 20 consecutive years.
Despite these concerns, Serna believes that the adjustment may not significantly alter the consensus EPS forecast of $3.65 for FY25 already established on Wall Street. He also noted that the market seems to have anticipated this situation, as reflected in Columbia Sportswear’s stock performance, which has declined 19.1% over the past month, compared to the S&P 500’s 3.5% drop.
Serna added that while there is a possibility that Columbia Sportswear might maintain its FY25 EPS guidance excluding the impact of the recent tariffs, he expects the market to remain skeptical due to ongoing gross margin percentage (GM%) concerns. The options market is currently pricing in a potential 6.3% fluctuation in Columbia Sportswear’s stock price around the earnings announcement, compared to a historical average move of 5.9%. However, UBS anticipates the actual volatility to be less than the historical average.
In other recent news, Columbia Sportswear reported fourth-quarter earnings that did not meet analyst expectations, with earnings per share of $1.80 compared to the anticipated $1.86. Despite this, the company saw a slight revenue increase to $1.1 billion, surpassing estimates of $1.07 billion. However, the guidance for the full year 2025 was less encouraging, with projected earnings per share between $3.80 and $4.15, below the expected $4.35, and revenue forecasts ranging from $3.40 billion to $3.47 billion, slightly under the consensus estimate of $3.48 billion. In other developments, UBS maintained a Sell rating on Columbia Sportswear, with a price target of $60, citing ongoing challenges such as competition and cost pressures. UBS analysts forecast a 7% compound annual growth rate in earnings per share over the next five years, suggesting a cautious outlook for the company. Meanwhile, Stifel adjusted its price target for Columbia Sportswear from $100 to $91 but retained a Buy rating, highlighting the company’s potential to navigate market challenges. Stifel’s analysis acknowledged the competitive landscape and the need for Columbia Sportswear to stay ahead of consumer trends. Columbia Sportswear’s recent performance and guidance indicate that the company continues to face significant challenges in a competitive retail environment.
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