5 Reasons To Own Pool Company Leslie's Stock

Pool company Leslie’s Inc LESL is seeing shares trade higher on an analyst upgrade and new price target. Here are five reasons why shares of Leslie’s could go higher.

The Leslie’s Analyst: Bank of America analyst Elizabeth L. Suzuki is upgrading shares of Leslie’s from Neutral to Buy and issuing a new price target of $36.

Related Link: Leslie Pool Corp IPO: What Investors Need To Know

The Analyst Takeaways: Five reasons are offered in the analyst note laying out the bull case for Leslie’s stock.

1. Residential pools could stay open longer than normal in 2021 due to the Covid-19 delays of “reopening” of travel and sports with new variants. The longer time of pools being open could lead to increased spending on pool chemicals and cleaning supplies.

2. Inflation could continue to benefit Leslie’s comps with commodity prices on items like chlorine rising. “As the largest retail chain in the category, LESL also has a competitive advantage in sourcing product that has limited availability,” Suzuki said.

3. Leslie’s has several business initiatives put in place for the next pool season, the analyst notes. Ten residential stores were converted to Leslie’s Pro locations and more new stores are being opened. The AccuBlue Home water testing 2.0 version will be live in time for next year’s pool season.

4. Google trends show strong interest in searches for “pool installation” and “hot tub,” which could indicate a strong backlog for the company in the future.

5. An attractive valuation on shares is the final of five reasons from the analyst for shares getting a price target of $36. Shares are now below 20x EV/EBITDA for the first time since completing the IPO.

Suzuki says it’s time to “hold your nose and jump in” on shares of pool supplier Leslie’s

LESL Price Action: Shares of Leslie's are up 3.27% to $23.39 on Friday.