Wedbush Lowers Price Target on Smith & Wesson (SWHC), Strong Quarter But Weak Outlook
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Price: $21.08 --0%
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush is maintaining its Outperform rating on shares of Smith & Wesson (NASDAQ: SWHC), but is reducing its price target by $1 to $4.
The company released its first quarter results ahead of expectations with $99 million in revenue and EPS of $0.02, Street was calling for $95 million in revenue and EPS of $0.00. The firm notes that the upside was largely due to its core firearm segment which experienced a 18 percent sales growth and accounted for 87 percent of total sales.
During the first quarter, U.S. firearms sales rose 11 percent while SWHC's brand increased 44 percent, representing substantial market share gain.
Smith & Wesson lowered its full year 2012 guidance as trends show weakening demand in perimeter security. Sales in the perimeter security segment fell 56 percent to only 13 percent of total sales. The company reaffirmed its 2012 operating expenses guidance of 25 percent of total sales, but lowered its gross margin for the fiscal year from 30 percent to 28-30 percent.
To go inline with the company's new guidance and market trends, Wedbush is reducing its 2012 revenue estimate from $425 million to $419 million and its 2013 estimate from $451 million to $443 million. For EPS, the firm is cutting its 2012 and 2013 estimates from $0.27 and $0.34 to $0.24 and $0.33.
An analyst at Wedbush comments, "As strength in the core firearms segment is partially offset by a weakened outlook for the perimeter security business, we believe shares of SWHC should trade in line with the peer group average."
For more ratings news on Smith & Wesson Holding click here and for the rating history of Smith & Wesson Holding click here.
Shares of Smith & Wesson Holding closed at $3.06 yesterday.
The company released its first quarter results ahead of expectations with $99 million in revenue and EPS of $0.02, Street was calling for $95 million in revenue and EPS of $0.00. The firm notes that the upside was largely due to its core firearm segment which experienced a 18 percent sales growth and accounted for 87 percent of total sales.
During the first quarter, U.S. firearms sales rose 11 percent while SWHC's brand increased 44 percent, representing substantial market share gain.
Smith & Wesson lowered its full year 2012 guidance as trends show weakening demand in perimeter security. Sales in the perimeter security segment fell 56 percent to only 13 percent of total sales. The company reaffirmed its 2012 operating expenses guidance of 25 percent of total sales, but lowered its gross margin for the fiscal year from 30 percent to 28-30 percent.
To go inline with the company's new guidance and market trends, Wedbush is reducing its 2012 revenue estimate from $425 million to $419 million and its 2013 estimate from $451 million to $443 million. For EPS, the firm is cutting its 2012 and 2013 estimates from $0.27 and $0.34 to $0.24 and $0.33.
An analyst at Wedbush comments, "As strength in the core firearms segment is partially offset by a weakened outlook for the perimeter security business, we believe shares of SWHC should trade in line with the peer group average."
For more ratings news on Smith & Wesson Holding click here and for the rating history of Smith & Wesson Holding click here.
Shares of Smith & Wesson Holding closed at $3.06 yesterday.
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