Party City is defying the odds in an abysmal environment for retail

Party City has a reason to celebrate.

A note out March 13 by a group of Credit Suisse analysts led by Seth Sigman says the firm should expect numerous growth opportunities in 2017 thanks to healthy underlying trends and a unique business model.

The bank's target price for Party City (PRTY) stands at $19.00, above its current $13.98.

That might sound surprising considering the numerous pressure points that have cut into the bottom line of many brick-and-mortar stores.

According to the bank, "everyday business grew 3% in 2017" at Party City, "accelerating in the back half of the year as 3Q/4Q grew 3.5%/3.0%, respectively."

The strength in everyday business is evidence of the firm's stability outside of the big blockbuster holidays such as Halloween. The bank attributes Party City's success to its vertical business model, which they say "provides incremental sales drivers, continued margin benefit, and helps navigate the inherent volatility in retail."

"Vertical model and wholesale operations remain key differentiators," the bank said.

"[Party City's] recently announced acquisition of Granmark shows management's focus on manufacturing and distribution, as the company continues to grow its wholesale revenue to discount retailers and mass merchants," they added.

The firm's expansion into "alternative channels" such as movie theaters and sports has also been a tailwind. Those business segments witnessed an 11% increase in 2016 to $60 million.