By Sam Boughedda
Loop Capital analysts upgraded shares of Pool Corp (NASDAQ:POOL) and Leslie's Inc (NASDAQ:LESL) to Buy in a note to clients on Thursday.
The analysts maintained a $16 per share price target on Leslie's but lifted the firm's price target on POOL to $415 from $395. They told investors the upgrades are based on the firm's latest pool survey.
"We're upgrading POOL and LESL to BUYs from Hold as our latest pool survey indicated an FY23 outlook that was better than expected, and with POOL shares down 25% since recent highs in early February and LESL down 33%, we think the pullback offers a good buying opportunity especially as we expect both companies to reiterate guidance against valuations that implies meaningful downside to estimates from here," the analysts wrote.
They noted that while it rained in California, results in other markets were solid, and it was much hotter than normal in the Southeast.
"While we trimmed March quarter estimates to be conservative, there should be opportunities the rest of the year to make up for lost time," they said. "Full-year expectations look solid, especially in non-weather hit markets."
"Most of our contacts, especially those who were not impacted by 1Q weather, indicated that their full-year sales expectations did not change compared to 90 days ago."
The analysts also stated that their key contacts think certain components of LESL's and POOL's guidance could see modest upside potential.