Iconix Brand (ICON) PT Cut to $25 at Brean Capital Following CEO Exit; 'Buy' Maintained

Brean Capital analyst Liz Pierce lowered her price target on Iconix Brand (NASDAQ: ICON) to $25.00 (from $34.00) following the surprise CEO exit, but reiterated a Buy rating on compelling fundamentals.

Pierce commented, "Complete sweep of the C-Suite should not overshadow compelling fundamentals of the licensing model. We appreciate that optically the turnover of ICON’s entire executive team in a very short period of time does not look good, however in our view, it should not overshadow the compelling fundamentals of the pure play licensing model, which include considerable revenue visibility given guaranteed minimum revenues, strong free cash flow generation, margin protection, minimal capital needs and limited operational risk. Moreover, we believe ICON possesses some very strong brands with considerable growth potential, especially in the area of sports and entertainment and we believe the acquisition pipeline remains robust. Finally, perhaps a clean sweep of the C-Suite is what is necessary to restore investor confidence and therefore, we are sticking with our Buy rating. However, in light of the stock’s pullback, we are lowering our TP to $25 from $34; our $25 TP is based on 7x our FY16 non-GAAP EPS estimate of $3.38 and a 0.7x PEG ratio."

For an analyst ratings summary and ratings history on Iconix Brand click here. For more ratings news on Iconix Brand click here.

Shares of Iconix Brand closed at $19.60 yesterday.

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