On Tuesday, TD Cowen reaffirmed its buy rating and $18.00 stock price target for Amer Sports Inc. (NYSE:AS), highlighting the company as a top pick within its market cap range. The firm's endorsement comes amid expectations of significant growth in earnings before interest and taxes (EBIT) in the second half of 2024 and strong performance from Amer Sports' brands Arc'teryx and Salomon.
The bullish stance on Amer Sports is based on the firm's sum of the parts valuation, which suggests an attractive valuation for both the Arc'teryx and Salomon brands. While acknowledging the likelihood of additional public share offerings, TD Cowen anticipates these would be accompanied by a corresponding increase in EBIT dollars.
Amer Sports, with a market cap between $10 billion and $2 billion, is positioned for outsized EBIT growth in the latter half of the year. This growth is expected to be driven by continued momentum and effective execution of strategies at its leading brands, Arc'teryx and Salomon.
The firm's analysis indicates that despite the potential increase in public float, Amer Sports' financial performance is poised to strengthen. Investors currently hold 13% of the company's float, and future offerings are predicted to support the company's expansion efforts.
In summary, TD Cowen's reiteration of a buy rating and $18.00 price target for Amer Sports reflects confidence in the company's growth prospects and the value of its brand portfolio. The firm anticipates that the upcoming developments in the second half of 2024 will bolster Amer Sports' financial standing.
In other recent news, Amer Sports Inc. experienced a series of analyst ratings adjustments and released its annual report for fiscal year 2023. Morgan Stanley lowered its price target on Amer Sports shares to $15, maintaining an Equalweight rating, following a mixed Q1 performance and a less than favorable Q2 forecast. In contrast, UBS held firm with its Buy rating and a price target of $23, noting an increase in Amer Sports' full-year 2024 earnings per share (EPS) guidance and strong Q1 sales.
JPMorgan also reiterated its Overweight rating on Amer Sports, with a steady price target of $19, commending the company's portfolio of premium brands and transformational steps taken by the management.
Meanwhile, Wells Fargo maintained its price target at $17, recognizing the company's strong Q1 performance but also highlighting potential concerns, such as flat North American sales and a Q2 revenue guide falling short of initial projections.
In addition, Amer Sports has filed its Annual Report on Form 20-F for the fiscal year that ended on December 31, 2023, now available to the public through the Securities and Exchange Commission (SEC). These are some of the recent developments surrounding Amer Sports Inc.
InvestingPro Insights
As Amer Sports Inc. (NYSE:AS) navigates through its growth phase, the latest data from InvestingPro provides additional context for investors considering TD Cowen's optimistic outlook.
With a current market cap of $7.16 billion, the company is trading at a high EBIT valuation multiple, which is reflected in the negative P/E ratios of -27.07 and an adjusted -34.37 for the last twelve months as of Q1 2024. This suggests that while the company's earnings are not currently covering its share price, growth expectations may be factored into its valuation.
InvestingPro Tips highlight that Amer Sports is expected to see net income growth this year, despite the fact that it has not been profitable over the last twelve months. This aligns with TD Cowen's forecast of significant EBIT growth in the latter half of 2024. Moreover, the company's liquid assets surpass its short-term obligations, indicating a solid liquidity position that can support ongoing operations and growth initiatives.
The company's revenue has shown a healthy increase, with a 16.98% growth in the last twelve months as of Q1 2024, and a quarterly revenue growth of 12.62%. Still, it is worth noting that EBITDA has experienced a decline of 14.58% in the same period. Amer Sports does not pay a dividend, which may be a consideration for income-focused investors.
For those interested in a deeper dive into Amer Sports' financial health and future prospects, InvestingPro offers additional tips. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to the full suite of insights and analysis that could help in making more informed investment decisions.
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