Cowen Highlights Vista Outdoor's (VSTO) Largest Customer Walmart to Downsize Ammo Exposure
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Cowen analyst Gautam Khanna reiterated a Market Perform rating and $5.00 price target on Vista Outdoor (NYSE: VSTO) on news Walmart, its largest customer. will stop selling .223/5.56 caliber, hand gun, and assault-style ammunition. Khanna views this as another headwind to VSTO's shooting sports segment.
The analyst commented, "Walmart represents ~14% of VSTO sales (per August 2019 Investor Presentation), although it is unclear how its exposure is split between Shooting Sports and Outdoor Products. Walmart expects its U.S. ammo market share to fall from ~20% to 6-9%. VSTO's total ammunition sales were down 10% in FY19 in the face of anemic gun demand (Adj. NICS -8.2% in the same period)."
Shares of Vista Outdoor closed at $5.59 yesterday.
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