Genesco (GCO – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Jeff Lick from B.Riley Financial downgraded the rating on the stock to a Hold and gave it a $31.00 price target.
Jeff Lick has given his Hold rating due to a combination of factors including a projected deeper trough in the first half of fiscal year 2024 and a delay in the expected benefits from new leadership at Genesco’s Journeys division. The price target was adjusted from $45 to $31, reflecting a reduction in the next twelve months’ EBITDA estimate from $85 million to $61 million, which suggests a more cautious outlook on the company’s short-term financial performance. Genesco’s recent preannouncement of weaker fourth-quarter earnings and lowered guidance, coupled with broader industry trends such as softer demand and increased promotional activity, further justify the neutral stance.
Moreover, the report indicates that the Journeys division may struggle with its product assortment in the first half of 2024 due to longer lead times in footwear, which inhibits quick strategic shifts. Challenges for the brand include adapting to changing consumer preferences away from previously popular brands like Vans. While there is optimism for the long-term impact of the new Journeys leadership, their influence is expected to be more pronounced towards the end of 2024 or into the first half of 2025. Other factors, such as the potential for store closures and the performance of other divisions like Schuh and Johnston & Murphy are also considered, with the latter being a potential bright spot despite tougher year-over-year comparisons.
See Insiders’ Hot Stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Genesco (GCO) Company Description:
Genesco, Inc. engages in the retail and sale of footwear, apparel, and accessories. It operates through the following segments: Journeys Group, Schuh Group, Johnston & Murphy Group, Lids Sports Group, and Licensed Brands. The Journeys Group segment comprise of the Journeys, Journeys Kidz, Shi by Journeys and Little Burgundy retail stores, catalog and e-commerce operations. The Schuh Group segment includes schuh retail footwear chain and e-commerce operations. The Johnston & Murphy Group segment covers Johnston & Murphy retail operations, e-commerce and catalog operations, and wholesale distribution. The Licensed Brands segment comprises of Dockers Footwear, sourced and marketed under a license from Levi Strauss & Company, SureGrip Footwear, occupational footwear primarily sold directly to consumers and other footwear brands. The company was founded in 1924 and is headquartered in Nashville, TN.
Read More on GCO:
