Citi Has Upgraded Billabong To "Buy" And Is Less Worried About Its Solvency

Getty/Michael Buckner

A Citi analyst has upgraded Billabong to “buy,” and is less worried about its solvency after the surfwear retailer’s private equity deal was announced.

Billabong’s brand value was never an issue but its ability to fund long-term liabilities was, Citi analyst Craig Woolford told Fairfax.

“We believe that risk is now greatly diminished. It will be a difficult journey and there are no quick fixes, but the board has avoided insolvency with an improved management team in our view,” he said.

The deal, brokered by private equity outfit Altamont, will see Billabong boss Laura Inman replaced by ex-Oakly chief executive Scott Olivet.

Yesterday the stock soared, closing 34 per cent higher at 33.5ยข.

Read more here.

Now read: Billabong Shares Are Through The Roof After Laura Inman Was Replaced As CEO

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