UBS raises Guess stock price target to $16.75 on take-private deal

Investing.com - UBS raised its price target on Guess (NYSE:GES) to $16.75 from $13.00 on Thursday, while maintaining a Neutral rating on the stock. The company, currently valued at $878 million, has seen its shares surge 75% over the past six months, with a year-to-date return of nearly 27%.

The price target adjustment follows Guess’s August 20th announcement that it had reached an agreement for a take-private transaction, under which current shareholders will receive $16.75 per share, representing a 25% premium to the company’s 15-day volume-weighted average price. InvestingPro data shows the stock currently trades at a P/E ratio of 63.3x, while maintaining an impressive 7.1% dividend yield with 19 consecutive years of dividend payments.

Post-deal, Authentic Brands Group (ABG) will own 51% of Guess’s intellectual property, while the "Rolling Stockholders" group—including Maurice Marciano, Paul Marciano, Nicolai Marciano, CEO Carlos Alberini, and certain of their respective trusts—will own the remaining 49% of intellectual property and 100% of the operating company.

The transaction is expected to close in the fourth quarter of calendar year 2025, after which Guess will become a privately held company.

UBS noted that until the transaction closes, Guess shares will likely trade based on deal dynamics rather than fundamentals, and separately mentioned that it has updated its estimates to incorporate Guess’s latest quarterly results.

In other recent news, Guess? reported its second-quarter financial results, which exceeded market expectations. The company achieved a 6% increase in revenue, reaching $772.9 million, surpassing analyst projections of $758.72 million. Adjusted earnings per share came in at $0.26, significantly higher than the anticipated $0.16. This positive outcome was largely driven by a strong performance in the European market, where comparable store sales grew by 14% in U.S. dollars and 9% in constant currency. The Americas Retail segment also showed signs of improvement, although it experienced a 5% year-over-year decline in same-store sales. Overall, total revenue increased by 3% in constant currency compared to the same period last year. These developments highlight Guess?’s ability to outperform expectations, particularly in its European operations.

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