Stifel 'Encouraged' by Pep Boys' (PBY) Focus on Fragmented Service Business; CEO Search Ongoing
Get Alerts PBY Hot Sheet
Price: $25.00 --0%
Rating Summary:
3 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
Rating Summary:
3 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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Stifel maintains Pep Boys (NYSE: PBY) with a Hold rating following Q3 results and update on CEO search.
Analyst James Albertine highlighted key points from PBY's results:
- Management noted a mix shift to branded from private label; Chinese made tires insulate PBY somewhat from tire tariff inventory/pricing/demand repercussions relative to its peer group. Management also noted branded tire manufacturers have held pricing to date (relative to increased pricing during the prior 2010-2012 Chinese-made tire tariff period). We note PBY did not increase inventory purchases ahead of the expected tariff decision. PBY noted a +3.1% increase in comp tire units and a +1.2% increase in comp tire pricing during 3Q14, blending to +4.3% tire comp sales.
- By region, PBY noted strength in Florida, Georgia, and San Francisco markets, as well as the Mid-Atlantic and Western service and tire center regions more broadly. Management noted weakness in the Central and North Central markets.
- Management highlighted gross margin pressures stemming from a mix shift to tire sales, commercial, and e-commerce businesses, as well a broad-based increased in promotional activity (market and PBY) y/y. We note digital sales rose +48% y/y in 3Q14 and represent roughly 5% of total sales, according to management.
- PBY reiterated its owned real estate value of roughly $720 mm.
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.
Pep Boys - Manny, Moe & Jack closed at $9.36 yesterday.
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