Wedbush Defends Tilly's (TLYS) after Major Sell-Off

November 21, 2012 9:37 AM EST
Get Alerts TLYS Hot Sheet
Price: $12.30 -5.53%

Rating Summary:
    5 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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With shares of Tilly's (NYSE: TLYS) down 18 percent early following results, analysts at Wedbush are out defending the company.

"While we are disappointed by the weak momentum leading into Q4, we believe the critical part of the Holiday shopping season has yet to begin and we note the company has been able to exit with healthy inventory levels (down 9% psf at Q3-end)," the firm comments. "In addition, we believe management has prudently managed towards their longt-erm goals of preserving overall brand equity via steady, high quality revenues on healthy margins, avoiding excessive promotions to “buy the
comp.” More importantly, we believe TLYS offers investors an attractive
square footage growth profile of ~+15%, above industry average of ~+3-4%
as the company noted that new stores in new markets (including OH, MI, and
NC) continue to exceed expectations."

Wedbush cut its price target from $18 to $16 but maintained an Outperform rating.

The firm cut Q4 OpEPS to $0.32 from $0.35, F12 OpEPS estimate to $0.90 from $0.94 prior, as F13 OpEPS estimate declines to $1.00 from $1.02.

For an analyst ratings summary and ratings history on Tilly's click here. For more ratings news on Tilly's click here.

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