Savers Value Village Inc (SVV) PT Lowered to $13 at UBS

UBS analyst Michael Lasser lowered the price target on Savers Value Village Inc (NYSE: SVV) to $13.00 (from $14.00) while maintaining a Buy rating.

The analyst commented, "While estimates might move modestly lower following SVV's print, we think the stock is set up well from here. This is for several reasons. First, the bulk of the downward revision is due to: a) currency changes that shouldn't be capitalized over the longer-term and b) the change of its definition of adjusted EBITDA to a more conservative approach. This should mean that its EBITDA is closer to a reflection of free cash flow. Beyond this, the company's profitability is going to be restrained this year by its investments in new stores. We believe these locations stores contain visible and latent profitability. The store openings are contributing a $10 mm EBITDA drag this year. The ultimate contribution should be a few multiples of that. Finally, we believe the company is embedding more conservatism in its outlook. This should help drive more consistency of its performance. This has been elusive since its IPO. Thus, we think the stock still offers more upside from here."

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