On Monday, BofA Securities maintained its Buy rating and $85.00 price target for Service Corp. International (NYSE:SCI) stock, a provider of deathcare products and services.
The firm's assessment follows a report from Placer.ai, which indicated a significant increase in average daily visitations to Service Corp.'s locations. According to the data, visitations in May 2024 rose by 15% month-over-month, marking the highest number recorded since 2017.
The robust visitor figures for May were noted to have balanced out a weaker April, resulting in the second quarter's visitation numbers aligning closely with those from the same period in the previous year.
While the overall trends were positive, the performance at the Rose Hills location did not follow suit, showing weaker year-over-year trends, which could signal a dip in high-end market demand.
Despite this, BofA Securities has reiterated its positive stance on Service Corp., citing the company's solid overall trends and strong cash flow generation. The firm's analysis suggests confidence in the company's stability and performance, despite the fluctuation in visitation at one of its premium locations.
Service Corp. International operates funeral service locations and cemeteries across North America. The company's financial health and market performance are closely watched by investors and industry analysts, as it serves as a significant player in the deathcare sector. BofA Securities' reiteration of its Buy rating and price target reflects a continued endorsement of the company's prospects.
In other recent news, Service Corp. International has been the subject of several noteworthy developments. UBS has raised its target price for Service Corp. shares from $83 to $85, maintaining a Buy rating.
This change follows Service Corp.'s reaffirmation of its annual earnings per share (EPS) growth goal of 8-12%, with management expressing confidence in exceeding this target 90% of the time.
Service Corp. has also declared a quarterly cash dividend of thirty cents per share, scheduled for payment later this year. The company's board will continue to assess the financial health of the company each quarter before declaring future dividends.
In its Q1 earnings report, Service Corp. reported a slight decline in adjusted EPS to $0.89, a $0.04 drop from the previous year. Despite lower funeral and cemetery revenues, the company saw an increase in pre-need cemetery sales and maintained its EPS guidance for the year.
Notably, Service Corp. returned $93 million to shareholders, signaling confidence in its financial performance. These are among the recent developments for Service Corp.
InvestingPro Insights
Service Corp. International's (NYSE:SCI) recent performance in the market can be further illuminated with real-time data and insights from InvestingPro. With a market capitalization of 10.38 billion USD and a P/E ratio that has remained stable at around 20.25, investors are looking at a company with substantial valuation metrics. The company's revenue growth over the last twelve months as of Q1 2024, has been modest at 2.27%, reflecting a steady business operation.
Among the InvestingPro Tips, it's noteworthy that Service Corp. has a commendable track record of raising its dividend for 10 consecutive years, and even more impressive, has maintained dividend payments for 20 consecutive years, with a recent growth of 11.11% in dividends. This could be a signal of the company's commitment to shareholder returns and its financial stability. However, two analysts have revised their earnings downwards for the upcoming period, which could suggest a need for investors to watch future earnings reports closely. Additionally, the company is trading at a high Price / Book multiple of 6.52, which indicates a premium valuation relative to its book value.
For investors seeking a comprehensive analysis, InvestingPro offers additional tips that could further inform investment decisions. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes more in-depth metrics and forecasts for Service Corp. International. With these insights, investors can better gauge the company's potential in the context of its current market performance and financial health.
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