UPDATE - Barclays Downgraded Express Inc. (EXPR) to 'Equalweight' After Good Run; Q4 Retail Preview

March 6, 2012 2:30 PM EST Send to a Friend
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Price: $14.09 -2.96%

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    6 Buy, 10 Hold, 0 Sell

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    Up: 24 | Down: 28 | New: 14
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UPDATE - Barclays downgraded Express Inc. (NYSE: EXPR) from Overweight to Equalweight, maintains price target of $23.00.

Analyst, Stacy Pak, said, "We are downgrading EXPR as the shares have had a good run, the company has already achieved meaningful sales and margin gains, go-forward compares look more difficult, contemporary fashion looks more competitive, and we think the SG&A hurdle rate will go higher going forward with an with international expansion/flagship strategy."

Pak commented on several retail companies that are reporting earnings this week, including American Eagle (NYSE: AEO), Aeropostale (NYSE: ARO), Ann Inc (NYSE: ANN), Zumiez (Nasdaq: ZUMZ) and Children's Place (Nasdaq: PLCE), highlighting AEO, ARO and PLCE as the most likely to benefit from cost recovery.

Although, Pak, did mention, that there could be a few more retailers that have a short-squeeze pop coming, citing examples of how Chico's (NYSE: CHS) and The Gap (NYSE: GPS) have jumped between 26-30% in the past 30 days. She said that despite ANN being Underweight rating, this stock could also be a short-squeeze candidate.

Barclays raises FY13 EPS estimate of EXPR from $1.82 to $1.88, AEO's FY13 from $1.02 to $1.14, ANN's FY12 from $1.67 to $1.68 and FY13 from $1.90 to $1.97 and ZUMZ's FY13 from $1.35 to $1.39.


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