UBS raises Guess stock price target to $12 from $11, keeps neutral

On Thursday, UBS analyst Mauricio Serna adjusted the price target for Guess (NYSE: NYSE:GES) shares, increasing it to $12.00 from the previous $11.00, while maintaining a Neutral rating on the stock. The revision follows the anticipation of a weaker than expected first-quarter performance due to sales difficulties in the Americas retail sector. The stock has experienced significant pressure, falling over 51% in the past year, with a current P/E ratio of 9.7x. InvestingPro data reveals that two analysts have recently revised their earnings expectations downward for the upcoming period.

Serna projects a 6 cents earnings per share (EPS) shortfall for Guess in the first quarter. He also suggests that the company is likely to retract its fiscal year 2026 guidance, citing the ongoing uncertainties surrounding the macroeconomic environment and U.S. tariffs. This expectation comes as no surprise, according to the analyst, as many of Guess’s industry counterparts have already taken similar actions during this earnings season. Despite these challenges, InvestingPro analysis shows the company maintains strong dividend payments, with a notable yield of 10.86% and a 19-year streak of consistent distributions.

The report from UBS indicates that any potential revision to Guess’s guidance would probably result in a lowered EPS forecast for FY26, ranging between $1.20 and $1.55. Despite this potential downgrade, the analyst believes that the current $13 per share bid from WHP Global will provide a floor for the stock price, preventing significant declines.

In terms of market reactions, the options market is pricing in a possible 2.9% fluctuation in Guess’s stock price around the earnings announcement, which is notably lower than the historical average movement of 12.8%. UBS concurs with the options market’s tempered expectations for the stock’s performance post-earnings.

In other recent news, Guess?, Inc. reported its fourth-quarter 2025 earnings, surpassing analyst expectations with an adjusted earnings per share (EPS) of $1.48, compared to the forecasted $1.43. The company also saw a 5% increase in quarterly revenues, reaching $932 million. For the full year, Guess? achieved revenues of $3 billion, marking an 8% growth in U.S. dollars. The adjusted operating profit for the fourth quarter stood at $107 million, with a full-year adjusted operating margin of 6%.

Guess? has also announced a new licensing partnership with Sequel, a division of the Timex Group, to create a watch collection for the brand rag & bone, following Guess?’s acquisition of rag & bone’s operating assets. The inaugural collection is expected to launch in Fall 2025. Additionally, Guess? made its first brand acquisition with the purchase of Rag and Bone, which is expected to contribute significantly to revenue growth.

Analyst feedback from the earnings call indicated optimism about the growth potential of the Rag and Bone brand, with plans for further store openings in the U.S. and Europe. The company’s strategic initiatives include enhancing direct-to-consumer productivity and expanding brand awareness, with anticipated revenue growth between 3.9% and 6.2% for fiscal 2026.

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