Brean Capital Reiterates Buy on Manhattan Associates, Inc. (MANH) Ahead of 3Q Report
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Brean Capital reiterated a Buy rating and $75.00 price target on Manhattan Associates, Inc. (NASDAQ: MANH) ahead of the company's 3Q earnings report. Based on industry checks, Brean expects MANH to post another solid quarter result. Most recent checks indicate that large WMS replacement opportunity remains strong, which should translate into a positive trend in its large deal activity. Brean also expects MANH to maintain its FY16 guidance, perhaps slightly raising its EPS outlook to reflect any upside to its F3Q results.
Analyst Yun Kim commented, "Based on our checks into the industry fundamentals and competitive dynamics, we believe MANH is well positioned to deliver yet another solid steady quarter when it reports its F3Q results on October 18th, Tuesday. Checks with industry contacts continue to indicate the demand environment remains positive, especially in regards to large WMS (warehouse management system) opportunities. In addition, our checks into the company's largest WMS competitor indicates continued positive demand trends for both vendors and also favorable pricing environment. Overall, we believe the company is benefiting from positive spending trends in the retail vertical driven by omni-channel initiatives. Conversations with industry contacts indicate that the pace of omni-channel driven spending trend remains strong, which in turn also drives a healthy warehouse management systems (WMS) replacement cycle. Shares trade at 5.9x our CY17 revenue estimate, which is a premium to the industry average of 4.3x. Given our belief that much of MANH’s valuation premium is driven by its consistency in its execution, we expect the stock to move higher as it continues to put up steady top-line growth while showing improving margin leverage. We continue to maintain our Buy rating and $75 TP."
Shares of Manhattan Associates, Inc. closed at $56.45 yesterday.
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