Consumer Products

What to Look for in the Smith & Wesson Earnings Report

Smith & Wesson Holding Corp. (NASDAQ: SWHC) is scheduled to release its fiscal fourth-quarter earnings report after the markets close Thursday. The consensus estimates from Thomson Reuters are calling for $0.54 in earnings per share (EPS) on $214.55 million in revenue. The same period from the previous year had $0.40 in EPS on $181.00 million in revenue.

Ahead of this earnings report, the tragic killing of 50 people at an Orlando, Florida, nightclub had a predictable effect Monday on the stocks of gun makers. However, this tragedy will not have a true effect on the earnings in this report, but perhaps the next report or even for guidance.

After last December’s shooting in San Bernardino, California, applications for background checks jumped from 2.2 million in November to 3.3 million in December. After the Sandy Hook school shooting in December of 2014, applications rose from 1.8 million in November to 2.3 million in December.

A report Monday morning from CNBC noted that short interest in Smith & Wesson had risen 370% since January. The Orlando killings are very likely to prompt short sellers to close those positions as soon as possible, giving the gun makers’ shares more of a near-term boost.

In the past quarter a few analysts weighed in on the company:

  • Wedbush has a Neutral rating with a $23 price target.
  • Craig Hallum initiated coverage with a Hold rating.
  • CL King has a Neutral rating.
  • BB&T has a Hold rating.
  • Cowen has a Market Perform rating with a $29 price target.

So far in 2016, Smith & Wesson shares have underperformed the broad markets, with the stock down about 2%. Over the past 52 weeks, the stock is down 34%.

Shares of Smith & Wesson were trading at $21.55 on Thursday, with a consensus analyst price target of $28.89 and a 52-week trading range of $14.71 to $30.44.

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