BofA Turns Bullish On Latham Group; Barclays, Keybanc Ticks Up Price Target

BofA analyst Rafe Jadrosich upgraded Latham Group Inc SWIM to Buy from Neutral and raised the price target to $27 (an upside of 23%), from $18.
Jadrosich was concerned heading into the Q3 report that rising input costs and resin shortages would linger into 2022, but he now expects resin availability to improve sequentially and is raising his 2022 revenue growth forecast "significantly" to 25% year-over-year from 13% previously.
Barclays analyst Matthew Bouley raised the price target to $26 (an upside of 18.6%) from $23 and maintained an Overweight rating on the shares.
Bouley says the higher target appropriately reflects Latham's double-digit earnings growth narrative driven by fiberglass pool conversion.
Keybanc analyst Kenneth Zener raised the target to $27 (an upside of 23%) from $19 and maintained an Overweight rating on the shares.
Recently, the company reported Q3 net sales of $161.96 million (+27% Y/Y), beating the consensus of $159.66 million.
Net loss was $(11.3) million, or $(0.10) per share, missing the consensus of $0.16, driven primarily by non-cash stock-based compensation expense of $27.6 million.
Adjusted EBITDA was $36.1 million (+2.7% Y/Y), and the margin decreased to 22.3% from 27.6% for the prior-year period.
As of October 2, 2021, the company had cash and equivalents of $90.9 million and total debt of $234.2 million.
FY21 Outlook: Latham reaffirmed net sales outlook of $600 million - $620 million (consensus $609.38 million) and Adjusted EBITDA of $130 million - $138 million.
Price Action: SWIM shares are trading higher by 9.49% at $21.92 on the last check Thursday.

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