Analyst Randal Konik from Jefferies maintained a Buy rating on European Wax Center (EWCZ – Research Report) and decreased the price target to $15.00 from $18.00.
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Randal Konik has given his Buy rating due to a combination of factors that highlight the potential for European Wax Center’s stock to recover and grow. Despite mixed fourth-quarter results, the company has demonstrated strong expense management, with adjusted EBITDA surpassing expectations due to increased gross margins and reduced product costs. This prudent financial management indicates a solid foundation for future performance.
Additionally, the company’s strategic approach to its real estate footprint, including closing underperforming units, suggests a focus on long-term health and growth. Although current revenue figures and future guidance appear subdued, the anticipated stabilization of management and the potential for earnings recovery provide a positive outlook. These elements combined suggest that the stock has reached its lowest point and is poised for improvement, justifying the Buy rating.
Konik covers the Consumer Cyclical sector, focusing on stocks such as Lululemon Athletica, Nike, and SharkNinja, Inc.. According to TipRanks, Konik has an average return of -1.7% and a 40.44% success rate on recommended stocks.
In another report released yesterday, Truist Financial also maintained a Buy rating on the stock with a $6.00 price target.