MoneyTalks: Broker Wilsons reckons this youth apparel retailer is attractive and undervalued
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Broker Wilsons Advisory has placed an Overweight rating on youth casual apparel retailer, Universal Store Holdings (ASX:UNI), with a 12-month target price of $4.22 (vs current price of $2.85).
Last week, the company told the market that it was on track to deliver record sales in FY23, and material growth in EBIT compared to FY22.
However, UNI acknowledged there are increasing signs of pressure in the the youth market and its discretionary spending power.
Despite these tailwinds, Wilsons said it retains a favourable view of UNI given the retailer has an attractive store pipeline, and clear momentum from its brands, Perfect Stranger and CTC (Thrills).
Wilsons also believes UNI has a strong, experienced management team.
Valution wise, UNI is trading on a PE ratio of around 9x, versus its peers’ ratio of around 12.8x.
“We therefore believe a premium is warranted due to UNI’s growth profile,” said Wilsons.
Overall, Wilson believes UNI has an attractive product offering, a well aligned and experienced executive team, and attractive runways for growth in online, private label and physical store numbers.
“While macro conditions are volatile, UNI has a captive and relatively well capitalised customer base and a high ASP/Margin which sets it apart from peers,” the broker said.
Wilsons Advisory also has an Overweight recommendation on oncology biotech Clarity Pharmaceuticals (ASX:CU6), with a 12-month price target of $1.22 (vs current price of $0.76).
Clarity announced last week that its SeCuRE prostate cancer trial was advancing to cohort 2 after the completion of cohort 1 dosing.
The clinical trial is studying the effects of Clarity’s 67Cu SAR-bisPSMA on patients with metastatic castrate-resistant prostate cancer (mCRPC).
Cohort 1 was completed in six participants at the lowest dose level of 4GBq, with no dose-limiting toxicities reported.
Wilsons said that was an extremely important result, as it represents the first safety data provided for 67Cu-SAR-bisPSMA, and hence in the prostate cancer population.
Additionally, the cohort 1 results provide a potential positive read-through for the ongoing trial in neuroblastoma, which is currently assessing a higher dose of 67Cu-SARTATE.
Wilson said Clarity’s 67Cu-SAR-bisPSMA differs from others in development (for example: TLX-591, PNT2002), and on the market drug PLUVICTO.
PLUVICTO is currently undergoing supply issues, and as a result it’s believed that Clarity has placed increased urgency on this trial.
“We anticipate that the trial will conclude around the end of CY24,” Wilsons said.
In April, Clarity’s exclusive 67Cu production partner, NorthStar, provided an update regarding the anticipated availability of 67Cu “within a few weeks”.
“The imminent confirmation of this supply is clearly a significant de-risking point for Clarity for future, larger clinical trials, and product commercialisation,” said Wilsons.
The views, information, or opinions expressed in the interview in this article are solely those of the broker and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.