UBS maintained a Buy recommendation on Savers Value Village Inc (NYSE: SVV) and held a $16.00 price target, which the firm says equates to about a 46% increase from the current share price of $10.95. The stock has posted solid momentum this year, returning 16.7% year-to-date, and analyst price targets on the stock range from $11 to $19.
UBS indicated it does not anticipate many surprises from Savers' upcoming fourth-quarter release. The company has already provided preliminary Q4 figures showing an 8.8% increase in comparable sales in the U.S. and a 0.7% comparable sales rise in Canada. Savers is scheduled to report full results on February 19. Analysts, per the reporting, expect the company to be profitable in the current year despite a lack of profitability over the trailing twelve months.
The firm highlighted that adjusted EBITDA has faced pressure from macroeconomic headwinds in the Canadian business and from the drag associated with newly opened stores, which tend to be unprofitable in their first year of operation. UBS said it expects management to set a conservative target for Canadian growth for 2026.
Management's expansion strategy calls for the bulk of new store openings to occur in the United States, where Savers remains under-penetrated, according to UBS. The broker also noted that the company's business model should be resilient to concerns about disruption from artificial intelligence.
UBS argued that as Savers executes on its white space opportunity in the U.S. and as new stores transition from being headwinds to becoming tailwinds, the company could see meaningful appreciation in its share price. At the same time, data from InvestingPro shows the stock trading at a relatively high Price/Book multiple of 4.13, suggesting a degree of valuation premium at current levels even though net income is forecast to grow this year.
For investors seeking additional analysis, InvestingPro provides ProTips and a full research report on SVV, along with coverage across more than 1,400 U.S. equities.
Context and implications
UBS' reiteration reflects confidence in Savers' multi-year growth strategy centered on U.S. store expansion and in the view that initial openings will compress losses over time. The firm is balancing that view against near-term profitability pressures, notably from Canada and ramping stores, and a valuation that could be described as elevated on a Price/Book basis.