Oppenheimer Downgrades Chico's, Inc. (CHS) to Perform
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Oppenheimer downgraded Chico's, Inc. (NYSE: CHS) from Outperform to Perform with a price target of $16.00 (from $20.00), citing sales misses and said a private equity buyout is unlikely.
Analyst Anna Andreeva commented, "We are downgrading CHS to Perform, lowering PT to $16 (from $20). While tightly managed inventories are pressuring sales (units bought down for '15), recent heightened promotional activity at both Chico's and WHBM could drive less than expected margin expansion (Street looking for gross margins up 110 bps for '15). In addition, LSD comp guide for '15 could be at risk after miss in 1Q15 and likely another negative comp 2Q15. Trading at 21x '15E EPS (group at 19x), CHS multiple expanded 3-4x since 2H14's onset of inventory reduction initiatives, and in absence of upside to earnings estimates, could contract. With veteran CEO Dave Dryer retiring at yearend, there could be leadership transition risk, plus private equity buyout unlikely."
For an analyst ratings summary and ratings history on Chico's, Inc. click here. For more ratings news on Chico's, Inc. click here.
Shares of Chico's, Inc. closed at $16.56 yesterday.
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