Floor & Decor Stock: Some Analysts Say Buy, Some Say Sell
Smyrna, GA, November 12, 2018-Analysts have mixed opinions on what action to take regarding Floor & Décor stock.
Some have upgraded to a “buy” rating, and others have downgraded to “hold” or “neutral.” The varying actions are likely impacted by the retailer’s heavy mix of Chinese products and the looming 25% tariff, set to go into effect January 1.
Stifel explains its reasoning regarding its downgrade on the stock, “We have been impressed with Floor & Decor's recent results and growth projections, but we feel the stock has run up in 2018 to reflect that. Additionally, when factoring what is discounted in the stock price the metrics may be attainable but only in a perfect world. Unfortunately a cyclical retailer in this environment does not exist in one. We have run different scenarios over a 5-year time frame and could see a path that would give an investor a return of 12% per year over the next five years. We feel, however, an investor taking on the risks today may want more like a 15% return, which may be possible, but unlikely in our view. While we think FND has a best-in- class business model we are lowering our rating to a Hold at this time.”