Jefferies Raises Price Target on Genesco (GCO) Following Inventory Correction

Jefferies reiterated a Hold rating on Genesco (NYSE: GCO), and raised the price target to $65.00 (from $63.00), following a year of inventory correction. Although it cost a little more than expected in 4Q EPS and GM, management more than cleared the division’s inventory glut, ending FY16 with Lids’ inventory down 25%, ahead of the targeted 20% reduction. GCO guided FY17 EPS to $4.80-$4.90, which is encouraging after 3 years of flat to negative results.

Analyst Edward Plank commented, "Following a year of inventory correction, FY17 should finally mark the start of a substantial GM recovery for GCO's Lids division. In the meantime, the Journeys biz also remains solid and we see nice potential in the year ahead. However, our optimism remains muted for now as SG&A pressures are expected to drive 1H17 EPS down yr/yr, putting the onus on GCO to drive an even stronger 2H. Maintain Hold, PT to $65."

For an analyst ratings summary and ratings history on Genesco click here. For more ratings news on Genesco click here.

Shares of Genesco closed at $65.29 yesterday.

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