Analyst John Kernan from TD Cowen maintained a Buy rating on Amer Sports, Inc. (AS – Research Report) and keeping the price target at $18.00.
John Kernan has given his Buy rating due to a combination of factors influencing Amer Sports, Inc.’s future performance. Kernan perceives the company’s EBITDA and FY24 earnings per share guidance as conservative, particularly at the lower end, suggesting an upside potential. The anticipated end of the lock-up period in July, when Anta Sports could potentially sell its 47% stake, is also a point of focus. Furthermore, the expansion of the Arc’teryx stores is yielding high returns and enhancing the brand’s positioning compared to its competitors, which is a strong sign of the brand’s momentum and growth prospects.
Kernan anticipates improvement in the financial model and growth algorithm of Amer Sports, which should lead to better margins. He notes that Arc’teryx has seen an acceleration in direct-to-consumer key performance indicators after the fourth quarter. Additionally, Amer Sports’ Technical Apparel sector is expected to show significant year-over-year growth in the first quarter, further supported by a robust increase in site visitors. The Outdoor Performance segment, including the Salomon brand, is expected to maintain stable trends despite facing a challenging comparison period. Kernan’s sales estimates for the first quarter are optimistic, aligning with the higher end of guidance and consensus, and he foresees a notable gross margin expansion, supporting a positive outlook for the stock.
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Amer Sports, Inc. (AS) Company Description:
Amer Sports, Inc. designs, manufactures, markets, distributes, and sells sports equipment, apparel, footwear, and accessories in Europe, the Middle East, Africa, the Americas, China, and the Asia Pacific. The company operates through three segments: Technical Apparel, Outdoor Performance, and Ball & Racquet Sports. The Technical Apparel segment offers outdoor apparel, footwear, and accessories under the Arc’teryx and Peak Performance brands. The Outdoor Performance segment provides outdoor apparel, footwear, accessories, and winter sports equipment under the Salomon, Atomic, Armada, and ENVE brands. The Ball & Racquet Sports segment offers sports equipment, apparel, and accessories under the Wilson, DeMarini, Louisville Slugger, EvoShield, and ATEC brands.
