Simeon Gutman, an analyst from Morgan Stanley, maintained the Hold rating on Leslie’s (LESL – Research Report). The associated price target is $1.50.
Simeon Gutman has given his Hold rating due to a combination of factors impacting Leslie’s current market position and future prospects. The company is actively working on transformation initiatives aimed at strengthening its fundamentals, such as improving customer engagement and optimizing asset utilization. Despite these efforts, there are ongoing concerns about market share due to increased competition from e-commerce and other mass channels.
Additionally, Leslie’s is seeing some positive early results from its initiatives, such as improved inventory management and stable chemical pricing, which have contributed to better conversion rates. However, the company’s gross margins are expected to improve significantly only in the latter half of fiscal 2025, and the high leverage ratio remains a concern. The focus on debt reduction and managing inventory is crucial, but the competitive dynamics still pose challenges to achieving significant share gains.