Morgan Stanley lowered expectations on Torrid Holdings (CURV) due to concerns on decelerating consumer demand and margin pressures across retail.
The cautious view on Torrid from analyst Kimberly Greenberger and team for the fall and winter season led to a revised FY22 revenue forecast of $1.29B vs. $1.34B prior and $1.28B consensus. The forecast for FY22 adjusted EBITDA was cut to $173M from $180M.
"Our FY22 profitability estimates also decline, with gross margin falling by -50 bps and operating margin slightly more by -55 bps. We continue to apply a 5x multiple to our base case EBITDA, which sits slightly above the specialty retail peer group average."
Morgan Stanley has an Equal-weight rating and base case price target of $5 on CURV. The firm also has a bull case price target of $13 and a bear case price target of $1.
The Seeking Alpha Quant Rating on CURV bumped up to Hold from Sell on September 9.
Sector watch: Analysts in general have warned on the impact of the high level of inventory with retailers and pressure on consumer discretionary spending. Earlier on Thursday, Target said it was extending its promotions through the holiday season.