Brean Capital Reiterates Buy on Sequential Brands (SQBG) Following Investor Day
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Brean Capital reiterated a Buy rating and $15.00 price target on Sequential Brands (NASDAQ: SQBG) following the company's investor day. While yesterday's meetings provided relatively little in the way of incremental financial detail, management did give color on several of SQBG's organic growth initiatives.
Analyst Eric Tracy commented, "Yesterday, we had the opportunity to attend SQBG's investor day, with the agenda including presentations by Chairman William Sweedler, CEO Yehuda Schmidman, and Chief Creative Officer Martha Stewart, as well as a tour of the company's product development and marketing production offices. Following the event, we are maintaining our positive stance on shares of SQBG, predicated on an evolving model ultimately addressing the key overhangs to the story, including: 1) opportunity to optimize the capital structure, 2) demonstrating ability to sustain organic growth (driven primarily by Martha Stewart, but augmented by broad branded portfolio) and 3) improving liquidity. At current levels (~10x EV/EBITDA vs. historical of 13x), we believe risk/reward remains favorable. We maintain our Buy rating and $15 TP, based on unchanged FY16/FY17 estimates."
Shares of Sequential Brands closed at $7.95 yesterday.
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