UPDATE: Goldman Sachs Starts ClubCorp Holdings (MYCC) at Neutral
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(Updated - September 26, 2016 9:28 AM EDT)
Goldman Sachs initiated coverage on ClubCorp Holdings (NYSE: MYCC) with a Neutral rating and a price target of $16. Analyst Stephen Grambling said with strategic options limited and valuation modestly below peers, a Neutral rating is warranted.
"We believe MYCC has the opportunity to continue to roll up a fragmented golf industry and drive growth via both increased ONE penetration (ONE is MYCC’s benefits program) and 'reinventions.' High recurring revenue via membership dues should also help mitigate macro pressure. However, CROCI is muted given low margins and the high capital intensity of the business. Additionally, while “reinventions” have driven EBITDA growth, the returns on that spend are less clear amidst constant acquisitions and disruptions. Lastly, the golf industry continues to face headwinds and MYCC’s geographical footprint positions it neutral at best near term given exposure to a weak TX economy," said Grambling.
Shares of ClubCorp Holdings closed at $16.12 yesterday.
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