TSX higher on employment data
Investing.com - Wells Fargo raised its price target on Signet Jewelers (NYSE:SIG) to $90.00 from $75.00 while maintaining an Equal Weight rating following the jewelry retailer’s strong second-quarter performance. The stock, currently trading at $90.46, appears undervalued according to InvestingPro Fair Value estimates, with analyst targets ranging from $90 to $130.
The company reported positive comparable sales growth of 2%, with its three major brands showing mid-single-digit growth. Services led the performance with a 7% comparable sales increase, while merchandising and pricing execution in fashion jewelry contributed to the positive results. The company maintains strong financials with a healthy current ratio of 1.54 and operates with moderate debt levels, according to InvestingPro data.
Wells Fargo noted potential headwinds from new India tariffs that could create a $35-70 million impact to fourth-quarter EBIT. Signet sources 50% of its products from India, though management believes it can mitigate much of this impact by shifting production to other countries where its Indian partners have operations.
The analyst highlighted that July was the strongest month in the second quarter, with August reportedly performing similarly. Smaller banners including James Allen, Banter, and others are underperforming, while the company’s three major brands achieved mid-single-digit comparable sales growth.
Signet plans a pricing reset in September that could temporarily impact comparable sales, though management expects any headwinds to be temporary. The company’s fourth-quarter plan implies comparable sales between -4% and +1.5% with healthy gross margins excluding tariff impacts. With a strong gross profit margin of 39.5% and consistent dividend payments for 15 consecutive years, Signet demonstrates resilient fundamentals. For deeper insights into Signet’s financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Signet Jewelers reported a robust second quarter for fiscal year 2025, exceeding earnings expectations. The company achieved an adjusted earnings per share (EPS) of $1.61, surpassing the forecasted $1.24. Revenue also outperformed projections, reaching $1.54 billion compared to the anticipated $1.5 billion. These results highlight the company’s strong performance in the recent quarter. The earnings call provided further insights into the financial health of Signet Jewelers. Analysts had projected lower figures, but the actual results demonstrated significant growth. The positive earnings and revenue figures are notable developments for investors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.