Kits Eyecare Ltd. (KITS:CA) Haywood Securities Cuts Target on Valuation Concerns

Kits Eyecare Ltd. (KITS:CA)

Haywood Securities lowered its 12 month target price on Kits Eyecare Ltd. to C$20 from C$21, reflecting a more conservative valuation approach despite the company’s solid underlying growth trajectory and improving market share within the online vision care sector.

The firm noted that Kits continues to deliver impressive top-line growth, supported by strong demand for its direct-to-consumer contact lens and eyeglasses platform, as well as increasing brand recognition in both Canada and the United States. Revenue growth has been driven by the company’s expanding prescription glasses segment, higher repeat purchase rates, and effective digital marketing strategies that have deepened customer engagement.

However, Haywood’s revised target price incorporates moderating valuation multiples to reflect near-term macroeconomic uncertainty and slightly tighter consumer spending in discretionary retail categories. The analysts emphasized that while Kits is executing well operationally, and showing improved gross margins and scaling efficiencies, its stock performance could remain sensitive to broader e-commerce sector sentiment and potential margin volatility tied to supply chain costs and promotional activity.

Haywood maintained a positive long-term view, highlighting Kits’ vertically integrated model, proprietary manufacturing capabilities in Vancouver, and growing subscription-based revenue as structural advantages that should sustain double-digit earnings growth over time. The lowered target price, according to the firm, is not a reflection of weakening fundamentals but rather a prudent recalibration of valuation assumptions given current market conditions.

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