BWS Financial Downgrades Franklin Covey (FC) to Hold; Move to Sidelines Until Lower Price Point

July 10, 2009 9:46 AM EDT

BWS Financial downgrades Franklin Covey (NYSE: FC) to Hold.

BWS analyst says, "We are downgrading shares of Franklin Covey after Q3 results missed our estimates. The third quarter was supposed to be the period when FC would start to post superior EBITDA numbers than prior quarters. However, there were customers delaying orders leading to a revenue shortfall and a negative EBITDA during the quarter. FC did reduce their SG&A expenses during the quarter, as management was successful in cutting costs as promised. CEO, Bob Whitman, indicated on the earnings call that the plan to reach an EBITDA run rate of $24 million has been delayed by a few months. There is risk that FC could face order delays in Q4. The economy is having a harder time on the Company than was first indicated...We now do not foresee FC being able to achieve our EPS forecast of $0.54 in fiscal 2010. Therefore, it would be difficult to suggest FC shares would hit our price target of $10. We are recommending moving to the sidelines awaiting lower price points for reentry."

To see more analyst ratings on FC Click Here.

Franklin Covey Co. (FranklinCovey) provides integrated consulting, training and performance solutions focused on leadership, strategy execution, productivity, sales force effectiveness, effective communication and other areas.

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