Stifel Upgrades Francesca's Holdings (FRAN) to Buy
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(Updated - September 27, 2016 7:51 AM EDT)
Stifel upgraded Francesca's Holdings (NASDAQ: FRAN) from Hold to Buy with a price target of $18.00 (from $16.00). Analyst Richard E. Jaffe sees its business as unique, and he highlighted visibility on sales growth.
"We are upgrading shares of FRAN to Buy from Hold given the visibility for sales growth driven by store expansion and comparable sales lifted by an appealing merchandise assortment; the product of the re-invigorated merchandising effort. With possible leverage on occupancy, operating margin expansion seems reasonable and the valuation attractive. Additionally, the company recently announced the appointment of Steven Lawrence as CEO, a good fit for the organization, in our opinion," said Jaffe.
"We are establishing a price target of $18, which represents 15.7x our 2017 EPS estimate of $1.15 ($0.03 above consensus). A 15.7x multiple is at a modest premium to the one year average of the consensus out-year multiple of 15x. With an attractive operating model and visibility for improved results we upgrade the shares to a Buy rating," added the analyst.
Shares of Francesca's Holdings closed at $15.26 yesterday.
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