The selloff in gun maker American Outdoor Brands Corp.’s stock has been “overdone,” said Wedbush analyst James Hardiman, but he still downgraded it to neutral from outperform, citing a lack of near-term catalysts. Hardiman also cut his stock price target to $11.00 from $13.50. The stock shed 0.6% toward a 7-month low in morning trade Wednesday, and has plunged 24% so far this month. The company reported last week fiscal third-quarter adjusted earnings and sales that beat expectations, but provided a downbeat fourth-quarter profit outlook. Hardiman said the selloff has been overdone, given the opportunity for the company to manufacture growth in 2020 without a major rebound in demand. “Investors are unlikely to get excited about the stock in the absence of such a rebound, however, while the near-term outlook, which includes the toughest [comparables] of the Trump era and a hazardous [fiscal year] 2020 guide, is more likely to further spook investors than bring them onboard,” Hardiman wrote in a note to clients. He said contacts at gun shops expect a sense of urgency for gun buyers to return in fiscal 2021 as the political environment heats up, but “such a far off catalyst” is not enough to recommend buying the stock today. The stock has tumbled 24.1% over the past 12 months while the S&P 500 has gained 0.8%.
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