Vista Outdoor (VSTO) PT Raised to $36 at Cowen Ahead of Earnings on Strong Channel Checks

March 25, 2021 7:01 AM EDT
Get Alerts VSTO Hot Sheet
Price: $41.22 --0%

Rating Summary:
    14 Buy, 3 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 6 | New: 6
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Cowen analyst Gautam Khanna raised the price target on Vista Outdoor (NYSE: VSTO) to $36.00 (from $33.00) after conducting ammo channel checks which indicate robust demand/pricing and limited inventory. The analyst expects the company to beat consensus estimates ($528MM; $0.63) and increase backlog growth, when it reports the March results sees expectations low for 2 reasons:

1) the U.S. ski season has been longer than planned for in guidance
2) ammo demand/pricing + Remington's hiring have been above plan

The analyst reiterated the Outperform rating, stating "Our channel checks confirm that ammunition supply shortages & "spot" pricing have continued to rise, despite the Y/Y slowdown in FBI NICS background checks, which is a proxy for firearm sales (Feb adj. NICS was +7.2%; March-May may be down Y/Y given +70-80% in prior yr period). E.g. Compared to prior firearm/ammo downturns, ammo channel inventory is scant, fear of stricter firearm regulations is high (Atlanta/Boulder shootings; Pres. Biden's platform), social unrest/anxiety is elevated, & new shooter growth (9 million) has exploded."



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