Ethan Allen Interiors is a buy at Argus with younger customers, VR software

Ethan Allen Interiors is a buy at Argus with younger customers, VR software

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Argus stayed constructive on Ethan Allen Interiors (NYSE:ETD) after taking in the retailer’s earnings report last week. Analyst Kristina Ruggeri and team said Ethan Allen’s sales and earnings are benefiting from new product lines targeting younger customers.

While current macroeconomic conditions are seen weighing on ETD’s sales, Charles and team anticipated that management’s efforts to transform the business will mitigate the impact on margins and earnings.

“We also expect that pent-up demand from would be home buyers and the continued migration of many city residents to larger suburban homes, albeit at a slower rate than during the first months of the pandemic, will help boost demand for high-end furniture .”

Ethan Allen’s (ETD) investment in virtual-reality software is also noted to have helped it grow revenue with one-third fewer sales associates.

Argus has a Buy rating on ETF and price target of $30. The PT implies a projected FY23 P/E multiple of 9X at the bottom of the historical range and marks a potential gain including the dividend of more than 25% from the current trading levels.

The Seeking Alpha Quant Rating on ETD moved to Hold from Buy on August 5 after the earnings report.

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