UBS Reiterates Buy on QVC Group (QVCA) Following Investor Presentation
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UBS reiterated a Buy rating and $30.00 price target on QVC Group (NASDAQ: QVCA) following the company's presentation at an investor conference. CEO, Mike George presented an update on Q3 operating trends at the conference. While the market reacted negatively to management's commentary, UBS continued to believe that the headwinds QVC currently faces are largely transitory in nature vs. structural.
Analyst Eric Sheridan commented, "Today, CEO of QVC Mike George presented at an investor conference and laid out the following as an update on Q3 operating trends: 1) the slowdown in the US business has persisted in Q3 ("modestly improved but still negative comps for the business" with QTD operating trends down high-single digits YoY); 2) the greatest pressures remain among QVC's core/most loyal customer base (impacted by macro), while retention and viewership remain healthy; 3) the most pronounced pullback was observed in apparel/fashion (inline with previous comments; slowdown from double digit growth to flat over the summer), and; 4) EasyPay: while write-off rates ticked up in Q4'15/earlier this year (as mgmt noted in its Q2 call), rates remain generally low (<2%; only limited impact on P&L). Additionally, we note that mgmt remains disciplined about cost-cutting incl. SG&A (e.g., guidance for $35m in cost savings next year) and shipping."
Shares of QVC Group closed at $19.59 yesterday.
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