According to Svezia, Finish Line has suffered over the years as it wasn't the best positioned to address changed trends and showcasing the right products to consumers. Moreover, the company has faced challenges with execution, e-commerce and its supply chain.
However, a mostly new management team
Svezia isn't the only Wall Street analyst who is bullish on Finish Line's prospects. Analysts at
Svezia's $25 price target is based on a 14x P/E multiple on an estimated earnings per share of $2.30, an estimate that "doesn't take much" to achieve. Specifically, the company could generate an earnings per share of $2.30 by fiscal 2020, which doesn't even include benefits from leveraging its supply chain, benefits from store remodels, full-priced sales, growth in digital and profitable or divested Jack Rabbit.
"Investors give little value to the after mentioned factors," the analyst argued.
In addition, Svezia is estimating Finish Line will achieve a free cash flow of $83 million in fiscal 2017 and $97 million in fiscal 2018, sufficient enough to support a healthy buyback program and a two percent dividend yield.
Finally, the analyst noted that shares of Finish Line are trading at 11x P/E, or a 14 percent discount to its five-year historical average.
Bottom line, the stock suffered from a "bumpy run but [Finish Line's] finish line finally maybe in sight."
At last check shortly after Wednesday's opening bell, Finish Line was up 2.55 percent at $19.70.
|Nov 2016||Wedbush||Initiates Coverage On||Outperform|
|Oct 2016||Susquehanna||Initiates Coverage On||Neutral|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.