Citi has reaffirmed its Buy rating on Signet Jewelers (NYSE: NYSE:SIG), maintaining a price target of $119.00.
The firm's stance comes ahead of the company's second-quarter earnings release, expected on September 12, before market open.
Citi's analysts project second-quarter earnings per share (EPS) of $1.16, slightly above the consensus estimate of $1.13 from FactSet.
Comparable sales are anticipated to decline by 3.0%, which is more optimistic than the consensus estimate of a 3.5% drop and aligns with the company's guidance of a 2-6% decrease.
Signet's management is expected to uphold its Fiscal Year 2024 guidance, which forecasts an EPS of $9.90 to $11.52, compared to the consensus of $10.04.
The expectation is based on the assumption that the fourth quarter will heavily influence the annual performance, and no significant deviations from the guidance are currently anticipated.
Key indicators for Signet's performance will include whether the company has capitalized on the positive shift in engagement ring trends observed in the second quarter. Despite this potential positive, the continued market share growth of lab-grown diamonds, which are experiencing double-digit price deflation, presents a challenging dynamic for Signet.
In other recent news, Signet Jewelers made significant changes to its credit facility, extending the maturity date from July 2026 to August 2029, and reducing the available aggregate commitment from $1.5 billion to $1.2 billion.
The move reflects the company's reduced inventory levels over the past three years. GrafTech International (NYSE:EAF) has announced the appointment of Rory O'Donnell as Chief Financial Officer and Senior Vice President, effective from September 2024.
On the financial front, Signet Jewelers reported robust revenues of $1.5 billion in the first quarter of fiscal year 2025, with an adjusted operating income of $58 million. This positive financial performance was driven by a resurgence in engagement sales, successful new fashion product lines, and a strong performance in jewelry services.
InvestingPro Insights
As Signet Jewelers (NYSE:SIG (LON:SHI)) approaches its second-quarter earnings release, InvestingPro data indicates a market capitalization of $3.59 billion and a compelling price-to-earnings (P/E) ratio of 5.59, which is even more attractive when considering the near-term earnings growth, positioning the company at a low PEG ratio of 0.17. The company's revenue for the last twelve months as of Q1 2023 stood at approximately $7.01 billion, despite a slight contraction in revenue growth during the same period. Notably, Signet has maintained dividend payments for 14 consecutive years, showcasing a commitment to shareholder returns, which is further evidenced by a dividend yield of 1.44%.
InvestingPro Tips highlight that Signet's management has been actively buying back shares and the company boasts a high shareholder yield, reflecting a proactive approach to capital allocation that may appeal to investors seeking companies with shareholder-friendly policies. Additionally, two analysts have recently revised their earnings estimates upwards for the upcoming period, suggesting a potential positive sentiment surrounding the company's near-term performance.
For those interested in a deeper analysis, InvestingPro offers additional insights into Signet's financial health and market position, including 15 more InvestingPro Tips available on the platform. As the company navigates the competitive pressures of the jewelry market, these data points and insights could provide investors with a more nuanced view of Signet's investment potential.
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