Stifel Trims PT on Express (EXPR) to $18; Sees Stock as Oversold Amid Headwinds, Remain Positive on Sales Trends

Stifel trims its price target on Buy-rated Express (NYSE: EXPR) from $24 down to $18 following Q1 results reported ahead of the opening bell on Wednesday.

Analyst Richard Jaffe offered the following commentary on Express with today's price target cut: The stock has traded off significantly today. However, we believe the stock is oversold at these levels. Through prudent expense management, strict inventory control (with shorter lead times and significant open to buy) we believe management is limiting the negative impact from external headwinds. We are optimistic that sales trends will improve with the onset of more favorable weather, possibly providing upside to management’s cautious guidance.

Longer-term we expect sales growth and operating margin expansion driven by: an improved merchandise assortment fueled by chasing into strong selling merchandise, increased newness, better systems, real estate rationalization, outlet and e-commerce growth and more compelling marketing.

As visibility for a return to low double digit operating margins become more evident, we believe the stock will trade up to our target price of $18 (approximately 10.5x our 2017 EPS of $1.68). A 10.5x multiple represents a discount to the one year average of the consensus out year multiple (12x), which we view as appropriate given current business trends, the analyst noted.

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

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