UPDATE: Morgan Stanley Starts Sterling Check (STER) at Equalweight

Morgan Stanley analyst Toni Kaplan initiates coverage on Sterling Check (NASDAQ: STER) with a Equalweight rating and a price target of $28.00.

THe analyst comments "We are initiating coverage of a.k.a. Brands (AKA, ~$1B market cap) at an Overweight rating and a $13 price target. Shares have had a rough go out of the gates post the company's IPO on September 22, and while we recognize there are a plethora of apparel & eCommerce names investors could choose from, this portfolio of profitable growth brands is worth a look. Our thesis is predicated on four drivers: 1) Strong appetite for apparel replenishment into 2022; 2) Princess Polly relevant with GenZ, ranking No. 7 for U.S. female teens; 3) Australia (41% of revenue) provides a hedge into 2022 as its economy opens up, providing international exposure (an offset to lapping U.S. stimulus); and 4) dislocated valuation vs. fundamentals. Looking at a SOTP analysis, at current share levels, Princess Polly alone (~60% of EBITDA) is trading at 16x EV/EBITDA 2022E, well below peers like RVLV or Zalando."

For an analyst ratings summary and ratings history on Sterling Check click here. For more ratings news on Sterling Check click here.

Shares of Sterling Check closed at $25.60 yesterday.

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