UPDATE: UBS Starts Pier 1 Imports (PIR) at Sell

(Updated - November 9, 2015 7:41 AM EST)

UBS initiated coverage on Pier 1 Imports (NYSE: PIR) with a Sell rating and a price target of $7.00.

Analyst Michael Lasser commented, "We are cautious on PIR for the following reasons: 1) the co's market position is being eroded by emerging players who offer products that are either less expensive or higher quality; 2) we think the migration of customers out of its stores to its online channel will continue and pressure its margins; 3) The increasingly competitive marketplace & PIR's distinct positioning will make it hard to attract incremental new customers; and 4) it has limited financial flexibility to continue its current pace of share repurchases. There are risks to our skepticism as PIR's recently strengthened leadership team could help resolve some of its recent inventory and execution issues. But, we aren't sold on the idea that the issues are transitional. Also, it's possible that PIR could explore a strategic transaction. But, we think its challenges won't be any easier to address away from the
view of the public markets or w. a partner. The stock is trading at 15x our CY'17E EPS. We see no reason why it should trade at a premium to BBBY (which is at 10x)."

For an analyst ratings summary and ratings history on Pier 1 Imports click here. For more ratings news on Pier 1 Imports click here.

Shares of Pier 1 Imports closed at $8.19 yesterday.

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