Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity research on small cap consumer names.

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

<ul><li>We are reiterating our Buy rating, raising our price target for VRA to $10 (from $9) and slightly lowering our top and bottom line projections for Vera Bradley after the company handily beat Street EPS for 3Q (while revenues were below expectations).</li><li>Further, implied 4Q guidance was below expectations, as we believe management has remained somewhat conservative as we enter the heart of the Holiday selling season.</li><li>That said, with inventories materially lower, cash balances (and no debt) continuing to rise, strong demand for key new fabrics and performance-driven items, we believe management is beginning to make a positive difference at Vera Bradley which will become increasingly obvious in FY25; as such, we are becoming more aggressive and raising our VRA price target to $10 (from $9) or 7.3X our FY25 EV/EBITDA projection.</li></ul>

We are reiterating our Buy rating, raising our price target for VRA to $10 (from $9) and slightly lowering our top and bottom line projections for Vera Bradley after the company handily beat Street EPS for 3Q (while revenues were below expectations).Further, implied 4Q guidance was below expectations, as we believe management has remained somewhat conservative as we enter the heart of the Holiday selling season.That said, with inventories materially lower, cash balances (and no debt) continuing to rise, strong demand for key new fabrics and performance-driven items, we believe management is beginning to make a positive difference at Vera Bradley which will become increasingly obvious in FY25; as such, we are becoming more aggressive and raising our VRA price target to $10 (from $9) or 7.3X our FY25 EV/EBITDA projection.

VRA: 3Q Review: Building the Pieces for the New Vera Bradley; Raising PT to $10