Children's Place's (PLCE) recent changes suggest positive developments, UBS Securities said in a report emailed Tuesday.
"With new majority shareholder Mithaq, Chairman Turki S. AlRajhi (also CEO of Mithaq), and President/Interim CEO Muhammad Umair, there's a fresh leadership lineup," UBS said, adding that given their recent involvement, management's learning curve may be "steep."
However, there are ongoing concerns where the company's management faces a tough industry landscape with giant competitors, UBS said. "Thus, even though management wants to take a long-term view, industry dynamics may not afford it the time it needs to put PLCE on a more sustainable path," it added.
Overall, there's a balanced outlook with both risks and opportunities. However, UBS significantly lowered the company's EPS estimates for 2024, 2025, and 2026 due to lower-than-expected performance, the note said.
UBS maintained its Neutral rating on the company and adjusted its price target to $12 from $24.
Price: 9.77, Change: -0.06, Percent Change: -0.61
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