Nomura Securities Cuts Estimates and Price Target on AnnTaylor Stores (ANN); Maintains 'Buy'
ANN Hot Sheet
Rating Summary:9 Buy, 4 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38
Nomura Securities maintains a 'Buy' on AnnTaylor Stores (NYSE: ANN) price target cut from $36 to $31.
Analyst, Paul Lejuez, said, "ATS store-only comps decreased 11%, below our (1)-(3)%E. Due to weak ATS comps/margins, 4Q EPS are expected to be ~$0.10 vs. prior implied guidance of ~$0.30. ATS had skewed its store assortment too much to the “best” category at a time when the mall was highly promotional, leading to weak results. Importantly, the company is exiting 4Q with clean inventories (ATS inv/sq ft is down) and carryover levels are below LY. We are reducing our F11E from $1.91 to $1.69. We are reducing our F12E from $2.44 to $2.09 based on lower comps and margins. We are reducing our DCF-based TP to $31 based on this revision, representing 5.5x our F12E EBITDA below the softlines grp median of ~7x. With potential improvements at ATS in F12 as pricing is adjusted, along with continued momentum at Loft, we expect results to improve. Trading at 4x our F12E EBITDA (vs. the group at 7x), the risk/reward as attractive."
For an analyst ratings summary and ratings history on AnnTaylor Stores click here. For more ratings news on AnnTaylor Stores click here.
Shares of AnnTaylor Stores closed at $22.91 yesterday, with a 52 week range of $19.00-$32.49.
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Analyst, Paul Lejuez, said, "ATS store-only comps decreased 11%, below our (1)-(3)%E. Due to weak ATS comps/margins, 4Q EPS are expected to be ~$0.10 vs. prior implied guidance of ~$0.30. ATS had skewed its store assortment too much to the “best” category at a time when the mall was highly promotional, leading to weak results. Importantly, the company is exiting 4Q with clean inventories (ATS inv/sq ft is down) and carryover levels are below LY. We are reducing our F11E from $1.91 to $1.69. We are reducing our F12E from $2.44 to $2.09 based on lower comps and margins. We are reducing our DCF-based TP to $31 based on this revision, representing 5.5x our F12E EBITDA below the softlines grp median of ~7x. With potential improvements at ATS in F12 as pricing is adjusted, along with continued momentum at Loft, we expect results to improve. Trading at 4x our F12E EBITDA (vs. the group at 7x), the risk/reward as attractive."
For an analyst ratings summary and ratings history on AnnTaylor Stores click here. For more ratings news on AnnTaylor Stores click here.
Shares of AnnTaylor Stores closed at $22.91 yesterday, with a 52 week range of $19.00-$32.49.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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