Piper Jaffray Raises Price Target on Genesco (GCO) Following 1Q EPS Beat
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Rating Summary:
3 Buy, 9 Hold, 1 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 9 | Down: 10 | New: 42
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Piper Jaffray maintained a Neutral rating on Genesco (NYSE: GCO), and raised the price target to $62.00 (from $61.00), following the company's 1Q earnings report. On the call management noted trends in the U.S. came in above expectations despite a tough traffic environment. GCO reported EPS of $0.62, ahead of Piper Jaffray's $0.36 estimate.
Analyst Erinn Murphy commented, "We are adjusting our estimates and PT to $62 (vs. $61 prior) following today's better-thanexpected Q1 results (EPS $0.62 vs. PJC $0.36). On the call, FY17 gross margin outlook was raised to +150-170 bps (vs. +130-150 bps prior), but SG&A expense assumptions were increased to 125-135 bps deleverage (vs. 100 bps prior) as a mix of bonus payments, rents and wages are expected to create pressure. As such, EPS guidance was unchanged and the contribution by quarter is expected to mimic FY16 (>80% in 2H). Despite the beat, which was incrementally favored by lapping one-time margin issues in last year's Q1, we elect to remain on the sidelines as we worry about the retail mall environment and the added expense burden that GCO is under. We are adjusting our estimates and basing our PT on 12x FY18E EPS."
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 $64.26 yesterday.
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