Can Helen Of Troy Outpace The S&P 500? Analyst Points To Areas To Watch With Earnings Imminent

Oppenheimer analyst Rupesh Parikh has a Perform rating on the shares of Helen Of Troy Limited HELE.

HELE shares are up 6% year-to-date versus a 14% increase in the S&P 500 and a 2% increase in the IWM, said the analyst.

The analyst continues to conservatively model Q2 EPS of $1.59 versus a $1.64 street figure, implying an EPS decline of ~30% versus management's implied guidance for Q2 EPS to decrease around 20% - 40%.

 A conservative FY23 guide coupled with a line of sight into EPS drivers next year, including Project Pegasus cost savings and potential tailwinds from debt paydowns, should drive EPS back to $10.00, according to the analyst.

The analyst believes management could introduce longer term targets, calling for low-single-digit sales growth and high-single digit bottom line growth. 

Given Project Pegasus and the company’s deleveraging opportunities, the analyst is more confident in the bottom line delivery at this juncture.

The analyst remains focused on efforts to drive a top-line turn, which is believed to be necessary for the stock to outperform. 

The company is scheduled to report its second-quarter earnings on October 4.

Price Action: HELE shares are trading higher by 1.38% at $117.59 on the last check Monday.