We are reiterating our Buy rating, $40 price target and projections for Regis as we look forward to 2024. We believe, as the company's fully shifts to a franchised hair care salon player, 2024 will see a deeper focus on driving hair salon traffic, materially accelerating the acceptance of the Zenoti operating system for franchisees and the launch of chain-wide customer relationship management ("CRM") and marketing efforts. Further, we believe management's current strategic review will, at least, extend current debt maturities and could, potentially, re-equitize and delever the balance sheets. Finally, we believe there remains the potential to begin to once again focus on growing the franchise base after another round of reducing low value franchises in 1H24. As such, while we understand the current investor discount on RGS due to visibility, we believe, for investors who are not risk averse, RGS is an interesting play on the next steps in a potential turn for the company.
04 Jan 2024
RGS: 2024 Signposts: Taking the Next Steps; Reiterate Buy, Price Target
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RGS: 2024 Signposts: Taking the Next Steps; Reiterate Buy, Price Target
Bath & Body Works, Inc. (BBWI:NYS), 0 | Regis Corporation (RGS:NYSE), 0 | Regis Corporation (RGS:NAS), 0 | Sally Beauty (SBH:NYSE), 0 | Sally Beauty Holdings, Inc. (SBH:NYS), 0 | ULTA SALON COSMETICS & FRAGR (ULTA:NYSE), 0 | Ulta Beauty Inc. (ULTA:NAS), 0
- Published:
04 Jan 2024 -
Author:
Eric Beder -
Pages:
4
We are reiterating our Buy rating, $40 price target and projections for Regis as we look forward to 2024. We believe, as the company's fully shifts to a franchised hair care salon player, 2024 will see a deeper focus on driving hair salon traffic, materially accelerating the acceptance of the Zenoti operating system for franchisees and the launch of chain-wide customer relationship management ("CRM") and marketing efforts. Further, we believe management's current strategic review will, at least, extend current debt maturities and could, potentially, re-equitize and delever the balance sheets. Finally, we believe there remains the potential to begin to once again focus on growing the franchise base after another round of reducing low value franchises in 1H24. As such, while we understand the current investor discount on RGS due to visibility, we believe, for investors who are not risk averse, RGS is an interesting play on the next steps in a potential turn for the company.