On Tuesday, Amer Sports Inc. (NYSE:AS) saw its price target increased by TD Cowen to $21, up from the previous $17, while the firm maintained a Buy rating on the stock. The adjustment comes as Amer Sports shows significant market capitalization growth, now exceeding $9 billion, an increase of more than 80% since its August lows.
TD Cowen's decision to raise the price target follows a meeting with Amer Sports' management in Shanghai. The analyst noted the enhanced store experience and the rising premium positioning of Amer Sports' brands, including Arc'teryx, Salomon, and Wilson. These factors contribute to the company's robust market performance, with its stock currently trading at 22 times its fiscal year 2026 estimated price-to-earnings (P/E) and 14 times its enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).
The firm's optimism is further bolstered by Amer Sports' management execution, which supports the acceleration implied in the second half of the year guidance for two of its leading brands, Arc'teryx and Salomon. The new price target of $21 is based on a 24 times fiscal year 2026 P/E ratio, reflecting confidence in the company's future earnings potential.
Amer Sports' market valuation reflects investor confidence in the company's strategic direction and brand strength. The upward revision of the price target by TD Cowen underscores the positive outlook for the company's financial performance and market position.
In other recent news, Amer Sports has been the focus of several analyst adjustments and robust financial results. Wells Fargo recently downgraded Amer Sports stock from Overweight to Equal Weight, while Baird and BofA Securities have maintained their Outperform and Buy ratings, respectively. This follows Amer Sports' impressive second-quarter results, which surpassed expectations with a significant revenue beat and an adjusted EBITDA that exceeded forecasts.
In terms of financial performance, Amer Sports reported a significant 60% revenue increase during the Golden Week period in Greater China, largely attributed to the successful performance of its brands Salomon, Wilson, and Arc'teryx. Furthermore, despite an operating loss, Amer Sports' adjusted operating profit increased by 40%, and the net loss decreased substantially.
The company has also raised its full-year guidance, now anticipating revenue growth of 15-17%. These recent developments underscore Amer Sports' ability to maintain growth and profitability in a challenging consumer environment. The positive outlook for Amer Sports is supported by the company's strong brand performance, particularly Arc'teryx, which is seen as a compelling growth story in the retail sector.
The company's strong performance exceeded analyst expectations, posting adjusted earnings per share of $0.05, beating estimates for a loss. Following these results, Amer Sports raised its full-year 2024 guidance, expecting an adjusted EPS of $0.40-$0.44.
InvestingPro Insights
Recent data from InvestingPro adds depth to TD Cowen's bullish outlook on Amer Sports Inc. (NYSE:AS). The company's market capitalization stands at $9.77 billion, aligning with the growth noted in the article. Amer Sports has demonstrated strong momentum, with a 33.22% price return over the past month and an impressive 69.86% return over the last three months. This performance supports the article's mention of the stock's significant increase since August.
InvestingPro Tips highlight that Amer Sports is trading near its 52-week high, with the current price at 97.97% of that peak. This corroborates the article's discussion of the company's robust market performance. Additionally, analysts predict that Amer Sports will be profitable this year, which could justify the higher valuation multiples mentioned in the report.
It's worth noting that InvestingPro offers 14 additional tips for Amer Sports, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights could be particularly valuable given the company's recent price target increase and positive management outlook discussed in the article.
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