Town Sports a Buy, Pre-Earnings
Town Sports International Holdings, Inc. (
CLUB) owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. The company is the fourth-largest fitness club operator in the country, measured by the number of clubs (161). We reiterate our Buy rating on shares of CLUB.
We consider the shares of Town Sports International to be undervalued at current levels. Shares of CLUB are trading at approximately 3.3x our 2008 EBITDA estimate, a multiple which we consider to be excessively low. Our $8.00 price target on shares of CLUB reflects a multiple of approximately 4.5x our estimated 2008 EBITDA. We consider this multiple to be conservative even in a recessionary environment.
In light of the company s strong position in its markets, we consider the long-term growth potential to remain attractive. The company will report Q3 results on October 30, 2008.
Related Stories
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
