Bank of America Cuts Torrid Stock Price Target to $2.00

Investment analysts at Bank of America have significantly reduced their target price for Torrid Holdings Inc. (NYSE: CURV) from $6.00 to $2.00. This adjustment came in a research note issued to investors on December 3, 2023, and while the firm maintains a “buy” rating on the stock, the new target implies a potential upside of approximately 73.16% from the stock’s closing price prior to the announcement.

This revision follows a series of mixed assessments from other analysts. Zacks Research recently upgraded Torrid from a “strong sell” to a “hold” rating on November 19, 2023. Conversely, Morgan Stanley decreased their price objective from $2.00 to $1.60, assigning it an “underweight” rating in a report issued on September 18, 2023. Similarly, the Goldman Sachs Group lowered its target price from $1.75 to $1.50, designating the stock as a “sell” in an analysis published on October 6, 2023.

In more positive news, Telsey Advisory Group reaffirmed a “market perform” rating, setting a price target of $3.00 on November 26, 2023. Overall, one analyst rates the stock as a buy, four have assigned a hold rating, and three have categorized it as a sell. According to data from MarketBeat.com, the consensus rating for Torrid stands at “reduce” with a consensus target price of $1.44.

Quarterly Earnings Report Reveals Financial Struggles

Torrid recently announced its quarterly earnings, revealing a loss of ($0.06) per share, which fell short of analysts’ consensus estimates of ($0.01) by $0.05. The company reported revenue of $235.15 million, below the expected $239.90 million. Additionally, Torrid reported a negative net margin of 0.18% and a negative return on equity of 1.69%. In the same quarter the previous year, the company had posted earnings of ($0.01) per share. Analysts project an earnings per share (EPS) of $0.14 for the current fiscal year.

Insider Transactions and Institutional Interest

Recent insider trading activity has also caught the attention of investors. Major shareholder Fund 1 Investments, LLC sold 25,000 shares of Torrid on December 3, 2023, at an average price of $1.31, amounting to a transaction total of $32,750. After this sale, the firm retains ownership of 9,904,856 shares, valued at approximately $12,975,361.36, marking a 0.25% decrease in their stake.

In another transaction, insider Ashlee Wheeler sold 16,959 shares on September 23, 2023, at an average price of $1.78, totaling around $30,187.02. Following this sale, Wheeler holds 107,443 shares valued at about $191,248.54, representing a 13.63% reduction in their ownership.

In the last three months, insiders have sold a total of 67,959 shares, valued at $108,697. Insiders collectively own 5.85% of Torrid’s stock.

Several institutional investors have also adjusted their positions in Torrid. Notably, BNP Paribas Financial Markets increased its holdings by 985.7% during the third quarter, acquiring an additional 22,030 shares. This brought its total holdings to 24,265 shares, valued at $42,000. Other firms, including Rhumbline Advisers and Royce & Associates LP, also expanded their stakes, while Public Employees Retirement System of Ohio entered the market with a new position valued at approximately $87,000.

Overall, institutional investors and hedge funds own a substantial 81.82% of Torrid’s stock, reflecting a strong interest in the company despite recent challenges.

Torrid Holdings Inc. focuses on women’s plus-size apparel and intimates within the North American market. The company is involved in designing, developing, and marketing products under various brand names including Torrid, Torrid Curve, CURV, and Lovesick, offering a range of clothing and accessories.