UBS raises Signet Jewelers stock price target to $95 from $84

On Wednesday, UBS analysts raised the price target for Signet Jewelers (NYSE:SIG) stock to $95 from $84, maintaining a Buy rating. This adjustment reflects the firm’s positive outlook on the company’s ongoing turnaround efforts. With a current market capitalization of $3.05 billion and a strong financial health score of "GOOD" according to InvestingPro, the company appears undervalued based on comprehensive Fair Value analysis.

Signet Jewelers, listed on the New York Stock Exchange under the ticker NYSE: SIG, has been focusing on enhancing its omnichannel capabilities, product offerings in bridal and fashion, and optimizing its supply chain. UBS analysts believe these initiatives are key to driving long-term sales growth. The company’s solid financial position is evidenced by its healthy current ratio of 1.5 and impressive free cash flow yield of 13%.

The company’s recent first-quarter sales results exceeded expectations, and current commentary suggests continued positive momentum. This supports UBS’s confidence in Signet’s strategic direction and progress towards its growth targets.

Additionally, Signet Jewelers has increased its earnings per share guidance for fiscal year 2026, demonstrating resilience in managing tariff challenges. UBS forecasts an 11% compound annual growth rate in earnings per share over the next five years.

UBS analysts anticipate that upcoming earnings per share results will exceed expectations, potentially driving the stock price towards the new target of $95.

In other recent news, Signet Jewelers has reported a robust first quarter, with comparable sales increasing by 2.5%, surpassing the consensus estimate of 1.1%. This growth was supported by an 8.0% rise in average unit retail prices. The company’s fiscal year 2025 earnings per share (EPS) guidance has been raised to a range of $7.70 to $9.38, up from the previous range of $7.31 to $9.10. Additionally, Fitch Ratings has upgraded Signet’s credit rating to ’BBB-’ from ’BB+’, citing improved leverage and financial conservatism, such as repaying all debt maturities using cash and credit facilities.

Citi analysts have maintained a Buy rating on Signet’s stock, increasing the price target to $100 from $85, due to the company’s successful strategy in expanding lab-grown diamond offerings. UBS also raised its price target for Signet to $84, maintaining a Buy rating, following improvements in the company’s fundamentals. Fitch anticipates operational challenges for Signet due to softening consumer sentiment and changes in tariff policy, but expects the company to maintain stable leverage.

Signet’s management has adjusted their guidance for the fiscal year, with expectations for comparable sales ranging from a decline of 2.0% to an increase of 1.5%. The company has also repurchased $132 million worth of stock year-to-date, representing 5% of its outstanding shares. Looking ahead, Signet plans to focus on growing its fashion business segment, which accounted for about 45% of its 2024 revenue, and optimize its retail footprint by closing or repositioning underperforming stores.

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