Nomura Securities Maintains a 'Neutral' on rue21, inc. (RUE); Raising Estimates, But Risk/Reward Balanced

May 25, 2012 8:38 AM EDT Send to a Friend
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Price: $41.99 --0%

Rating Summary:
    1 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

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    Up: 0 | Down: 0 | New: 0
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Nomura Securities maintains a 'Neutral' on rue21, inc. (NASDAQ: RUE) price target of $30.00.

Analyst, Paul Lejuez, said, "1Q EPS of $0.46 vs. our and cons of $0.43 and guidance of $0.42-$0.44.The qtr was solid, with positive comps and flattish GM. Comps continue to be positive in 2Q and the company’s fast-turn model is helping it avoid some of the fashion pitfalls (in tops) being experienced by competitors. We are increasing our F12E from $1.77 to $1.83 and our F13E from $1.97 to $2.04. Our biggest hang-ups with RUE is that the company doesn’t leverage SG&A (open 100+ stores a year and sales productivity has steadily declined). Trading at 16x F12E EPS, risk reward is balanced."

For an analyst ratings summary and ratings history on rue21, inc. click here. For more ratings news on rue21, inc. click here.

Shares of rue21, inc. closed at $27.00 yesterday.


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