On Wednesday, Lakeland Industries (NASDAQ:LAKE) shares saw its price target increased to $27.00, up from the previous $25.00, while its stock rating remained at Buy. The adjustment follows Lakeland's recent acquisition of LHD Group, a move that enhances the company's foothold in the firefighting gear market, particularly in Australia and Germany.
The acquisition of LHD Group, a German-based company with operations in Australia and Hong Kong, positions Lakeland Industries to capitalize on two of the world's three largest fire markets.
The deal also introduces LHD Care to Lakeland's portfolio, a service model focused on the cleaning and repair of firefighting gear, which is anticipated to be a significant growth area for the company.
Roth/MKM updated their financial model for Lakeland Industries to reflect the LHD acquisition. The firm expressed confidence in Lakeland's potential to expand the newly acquired LHD Care service model. This recurring revenue stream is expected to be a pivotal part of Lakeland's strategy moving forward.
The closing of the LHD Group acquisition marks a strategic expansion for Lakeland Industries. LHD Group is recognized as a leading provider of firefighter turnout gear, accessories, and LHD Care services, which are now assets under Lakeland's expanding portfolio.
With the updated price target, Roth/MKM signals its optimism about Lakeland Industries' prospects in light of the recent acquisition and the potential for growth in services related to the maintenance of firefighting gear.
InvestingPro Insights
As Lakeland Industries (NASDAQ:LAKE) embarks on a strategic expansion with the acquisition of LHD Group, the company's financial health and market position offer valuable insights. According to InvestingPro data, Lakeland boasts a market cap of approximately $165.19 million and a Price/Earnings (P/E) ratio of 28.59, which indicates the company is trading at a level that could be attractive relative to its earnings. Additionally, the firm has exhibited a solid revenue growth of 15.78% over the last twelve months as of Q1 2023, underscoring its expanding operations.
Two noteworthy InvestingPro Tips highlight Lakeland Industries' robust financial position: the company holds more cash than debt on its balance sheet and trades at a low P/E ratio in comparison to near-term earnings growth. These metrics could be interpreted as signs of a stable financial foundation and potential for increased shareholder value. Moreover, Lakeland's liquid assets surpass its short-term obligations, which may reassure investors of the company's ability to meet its immediate financial liabilities.
For those interested in deeper analysis, there are additional InvestingPro Tips available, including insights into the company's profitability and stock performance over various timeframes. To explore these further, visit https://www.investing.com/pro/LAKE and consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.