Wells Fargo analyst David Lantz maintained a Buy rating on Mister Car Wash (MCW – Research Report) yesterday and set a price target of $11.00.
David Lantz has given his Buy rating due to a combination of factors that suggest Mister Car Wash, Inc. (MCW) is well positioned for sustained growth and profitability despite a mixed fourth quarter. The company’s Q4 results showed weaker comparable store sales than projected, but an increase in adjusted EBITDA compared to the Street’s expectations. Furthermore, the FY24 outlook, while requiring downward revisions in estimates, appears achievable, supported by positive January comps, the ramping of benefits from their Titanium 360° program, and a potentially improving macroeconomic environment.
Lantz also points to long-term growth drivers for MCW, including a strategy for unit growth, sector rationalization, and the rising adoption of their Unlimited Wash Club (UWC). The growth in UWC membership and penetration in Q4, along with the company’s ambitious long-term unit growth target, underpin this optimism. Additionally, he acknowledges challenges such as labor costs but notes opportunities for MCW to leverage general and administrative expenses in FY24. These factors contribute to the rationale behind the Buy rating, indicating confidence in the company’s capacity to navigate headwinds and capitalize on market opportunities.
According to TipRanks, Lantz is a 3-star analyst with an average return of 14.7% and a 75.00% success rate. Lantz covers the Consumer Cyclical sector, focusing on stocks such as Monro Muffler, Mister Car Wash, and JOANN.
In another report released on February 15, Robert W. Baird also maintained a Buy rating on the stock with a $12.00 price target.
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Mister Car Wash (MCW) Company Description:
Mister Car Wash Inc is a car wash brand offering express exterior and interior cleaning services. Express Exterior Locations offers express exterior cleaning services and Interior Cleaning Locations offers both express exterior and interior cleaning services. The company recognizes revenue in two main streams. It offers an Unlimited Wash Club (UWC) program to its customers. The UWC program entitles the customer to unlimited washes for a monthly fee, cancellable at any time. Second, revenue from the car wash and quick lube services.
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