BTIG Keeps 'Sell' Rating on Pier 1 Imports (PIR); Says Activist Investor Doesn't Change Fundamental Issues
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BTIG affirms Pier 1 Imports (NYSE: PIR) at Sell with a price target of $3.50 following Q2 results issued Wednesday night.
The firm commented today:
We remain below guidance and the Street for 3Q16 and the all-important fourth quarter. PIR expects adj. 3Q EPS of $0.09-$0.15 on comps of (1-3)%. Our 3Q EPS estimate of $0.05 on a (1.5)% comp is $0.07 below the Street. For 4Q16, PIR expects adj. EPS of $0.24-$0.32 on comps of (1-3)%. We are at $0.17 in 4Q16 EPS, $0.11 below consensus, on a (2.0)% comp.
Furthermore, we do not believe the presence of an activist investor changes Pier’s challenged fundamentals and we also do not believe there is a strategic acquirer for PIR. We are maintaining our Street-low 2016 and 2017 EPS estimates of $0.09 and $0.12, respectively. We believe PIR’s 2016 adj. EPS guidance of $0.24-$0.32 is aggressive and note that PIR has lowered 2016 guidance for two consecutive quarters.
Lastly, PIR’s sizable dividend remains intact, but mgnt hedged that by stating it will continue to evaluate it in light of maintaining sufficient liquidity. We rate PIR shares SELL given our cautious view of the HF space and PIR’s significant exposure to online competition.
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