CSS Industries downgraded to Neutral from Buy at DA Davidson. DA Davidson analyst Linda Bolton Weiser downgraded CSS Industries to Neutral from Buy and lowered her price target to $24 from $31.50. Weiser notes that while Q3 EBITDA was close to expectations, that company also posted a 6% decline in organic sales, attributed in part to de-stocking by a major retailer. The analyst also lowers her FY18 organic sales projections to -6.4% vs. the prior expectation of an improvement from FY17's -4.5%.
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Kratos Defense (KTOS) initiated with a Neutral at Goldman Sachs. 2. CSS Industries (CSS) initiated with a Buy at DA Davidson. 3. Delphi Technologies (DLPH) initiated with a Neutral at Piper Jaffray. 4. Fly Leasing (FLY) initiated with a Sell at Citi. 5. GoDaddy (GDDY) initiated with a Neutral at Wedbush. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
CSS Industries initiated with a Buy at DA Davidson. As reported earlier, DA Davidson analyst Linda Bolton Weiser initiated CSS Industries with a Buy rating and a price target of $31.50. Weiser says the company is rebounding from an "atypical" 30% EBITDA decline in FY17, forecasting growth of 12% in FY18 and 14% in FY19 after its acquisition of Simplicity. The analyst notes the stock trades at only 6.3-times FY20 EBITDA and offers a 3% dividend yield and free cash flow of at least $25M annually. Weiser adds that among 31 consumer product companies, CSS Industries ranks fourth in terms of valuation.
CSS Industries announced that it has completed the acquisition of Simplicity Creative Group from Wilton Brands LLC for $64M in cash, subject to certain closing and post-closing adjustments. Simplicity is a provider of home sewing patterns, decorative trims, knitting and crocheting tools, needle arts and kids' crafts products under the Simplicity, Wrights, Boye, Dimensions, and Perler brand names. Simplicity's products are sold to mass-market retailers, specialty fabric and craft chains, wholesale distributors and online customers. The company expects to achieve annualized synergies of $4M-$5M by the third fiscal year after closing. The company financed the transaction primarily with borrowings from its existing credit facility.
CSS Industries announced that, effective June 19, Jeffrey DeSandre will join the organization as its new Vice President and Chief Information Officer. Effective with the commencement of DeSandre's employment, Lois Karpinski, who currently serves in the dual roles of Senior Vice President of Mergers and Acquisitions and Business Process, and Chief Information Officer, will focus entirely on serving as the executive leader responsible for coordinating cross-functional mergers and acquisition due diligence, acquisition planning and transaction integration. DeSandre most recently served as Chief Information Officer of First Quality Enterprises, a privately held manufacturer of private-label and branded consumer products.