ANN has halved from its mid-2021 high when in the middle of the pandemic most people thought we would be wearing rubber gloves for the rest of our lives, however, the disappointing factor is the stock is now trading below its pre-Covid levels even as we have become a more sanitised and health conscious society. As we saw with HLS earlier this year we saw earnings downgrades as rising costs flowed down to decreasing margins, as we often say MM aren’t fans of companies who cannot rally on good news and that’s very much been the case with ANN over the last 2-years.
- We feel the stock is reasonably priced trading on an Est. 15.5x earnings for 2022 but to entice MM we want to see some operational improvements dropping down to expansion in margins.
MM is neutral ANN is around $28
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