Piper Sandler analyst Peter Keith upgraded the rating on Floor & Decor Holdings to a Buy yesterday, setting a price target of $80.00.
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Peter Keith has given his Buy rating due to a combination of factors that suggest a positive outlook for Floor & Decor Holdings. One of the primary reasons is the expectation of a significant improvement in comparable sales by the first quarter of 2026, as the company moves past the demand pull-forward effects from the COVID-19 era. This anticipated normalization in demand is not reliant on a strong recovery in existing home sales, which have shown positive year-over-year growth recently, but rather on the broader trend of household durables returning to normal demand levels.
Additionally, Peter Keith highlights the potential for Floor & Decor to achieve a strong earnings growth trajectory, with a projected earnings per share of $3.70 by 2028. This growth is supported by a reasonable bull case scenario that includes comp growth and significant expense leverage. Furthermore, the current valuation of Floor & Decor shares appears undervalued, suggesting a potential upside of 25% to 50%. Other factors, such as the impact of tax refunds favoring the company’s customer base and the current market conditions, also contribute to the Buy rating, despite risks related to macroeconomic factors and competition.
Keith covers the Consumer Cyclical sector, focusing on stocks such as Wayfair, Leggett & Platt, and Home Depot. According to TipRanks, Keith has an average return of 11.6% and a 53.49% success rate on recommended stocks.