Stifel Says to Take the Money on Pep Boys (PBY); Shares No Longer Undervalued with Latest Icahn Offer

Stifel affirms Pep Boys (NYSE: PBY) at Hold following the revised Icahn offer.

James Albertine noted that the firm is "struggling" with valuation on the deal. At $18.50 per share, the offer puts PBY at 9.2 times enterprise value-to-EBITDA, which the firm doesn't see as undervalued.

Albertine commented, For the past 10 years, PBY has averaged same-store sales declines of -1.6% (past 8 of 9 years with negative comps) and operating margin of 1.8% (past 9 year peak of 3.8%) relative to peers' (AZO, AAP, ORLY and MNRO) average same-store sales growth of +2.6% and operating margin of 13.4% during the same period [...] We believe IEP likely has a clear vision for PBY, but struggle as we believe the past 10 years of underperformance relative to peers suggest issues are deeper than management, and perhaps necessitate structural remedies that could severely impact IEP's targeted returns on investment.

For an analyst ratings summary and ratings history on Pep Boys - Manny, Moe & Jack click here. For more ratings news on Pep Boys - Manny, Moe & Jack click here.

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