Vista Outdoor (VSTO) PT Raised to $29 at Cowen on Ammunition Demand
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Cowen analyst Gautam Khanna raised the price target on Vista Outdoor (NYSE: VSTO) to $29.00 (from $27.00) on the belief that the civil ammo demand surge will persist for longer than investors fear for several reasons:
1) Biden's win may sustain fear of restrictive firearm regulation (forcontext, ammo demand surges lasted for 6 months following Obama's elections)
2) cultural "Armageddon" mentality given COVID-19/civil unrest
3) a rise in new shooters
4) ammo supply shortages, which tend to stimulate demand
The analyst reiterated an Outperform rating, stating "VSTO's 9/30 ammo backlog= $1B (ex Remington), about a full year of organic demand, but admittedly, the backlog may include speculative orders (i.e. "double" orders made to VSTO & competitors) that may disappear if supply catches up. Mgmt asserts that it will take many months to ramp Remington's capacity (and VSTO has been at 24/7 ammo production since March), so a supply surge is unlikely for >2 Qs".
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Related EntitiesCowen & Co, Barack Obama
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