With retail business likely to improve in the near term, the industry's spending on omni-channel investments may increase, Brean Capital’s Yun Kim said in a report. She added that Manhattan Associates, Inc. (NASDAQ: MANH) was one of the top picks in the omni-channel segment, entering 2017.
Maintaining a Buy rating and a price target of $75 on the company, Kim wrote that Manhattan Associates represented “the best way to play omni-channel evolution in the retail vertical, which we believe is one of the strongest secular trends in technology today.”
Shares of Manhattan Associates have lost 20 percent year-to-date, and the underperformance does not reflect the company’s fundamentals, “which our checks continue to indicate remain strong, if not improving,” Kim pointed out.
Near Term Prospects
Recent checks had indicated that overall demand environment remained favorable.
“They continue to see strong legacy replacement cycle of WMS (warehouse management system) playing out,” the analyst mentioned. He added that the pricing environment also remained stable and favorable.
“With this year's retail holiday shopping season likely enjoying a better business than last year's disastrous one, we don't expect investor concerns regarding the health of the industry's capex spending for omni-channel investments to emerge, which was the case early this year,” the Brean Capital report stated.
Manhattan Associates faced easy year-over-year comps over the next three quarters, and should be able to generate 10 percent license revenue growth next year, beating the Street's expectation of 8 percent growth, Kim said.
Latest Ratings for MANH
|Apr 2016||William Blair||Downgrades||Outperform||Market Perform|
|Feb 2016||Avondale Partners||Initiates Coverage on||Market Perform|
|Jan 2016||Brean Capital||Initiates Coverage on||Buy|
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