Brean Capital Raises Price Target on Perry Ellis Int'l (PERY) to $27 Following 3Q
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Brean Capital reiterated a Buy rating on Perry Ellis Int'l (NASDAQ: PERY), and raised the price target to $27.00 (from $25.00), following the company's 3Q earnings report. PERY delivered EPS of $0.23, well above the consensus estimates for $0.15. Results were largely driven by better-than-expected GM. Revenues of $194M were in line with expectations and guidance.
Analyst Eric Tracy commented, "We are maintaining our Buy rating on shares of PERY following yesterday's upside 3Q print, with shares trading up +12% on in-line revs/EPS beat ($0.23 vs. our/cons $0.16/$0.15) that was largely driven by better-than-expected GM (reflected lower y/y inventories as part of ongoing Growth and Profitability Plan). While we acknowledge maintained 4Q rev guide ($885M-$900M, implies +7% y/y growth at the low end) isn't a low bar even given brand exit headwinds now in the rearview ($5M drag in 3Q), we also believe GM/cost levers make maintained EPS guidance ($1.95-$2.00) achievable. Looking into FY18, we believe benefits from an improved operating model support increasingly visible rev growth (core revs +3.5% in 3Q, +MSD range YTD) while accretive mix shifts (int'l/digital) should help support continued margin expansion, even following three years of material margin improvement. We tweak our FY17/FY18 estimates slightly higher, with our raised TP of $27 (from $25) based on shares trading at 13x our FY18 EPS est of $2.14 (vs. 11x-14x historically and peer group of 15x-16x)."
Shares of Perry Ellis closed at $24.41 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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