BofA double downgrades Leslie’s on weak free cash flow

Investing.com -- Bank of America downgraded largest US retailer of pool&spa supplies Leslie’s Inc to "Underperform" from "Buy" citing weak free cash flow generation and ongoing market share losses. The brokerage also cut its price target to $1.40 from $2.60 given concerns over the pool supplies retailer’s ability to pay down debt.

BofA lowered its earnings estimates on the firm following Leslie’s disappointing 2025 guidance. The company’s revenue outlook implies continued share loss, with expected sales growth of just 0.5% at the midpoint.

The firm also reduced its fiscal 2025 FCF estimate to $15 million, down from $37 million, limiting debt reduction prospects. While new CEO efforts to optimize inventory and enhance fulfillment centers could improve operations, BofA sees little near-term financial upside.

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