Wedbush Reiterates an 'Outperform' on Children's Place Retail Stores (PLCE); Raises Q4/FY09 Estimates

November 20, 2009 9:13 AM EST

Wedbush reiterates an Outperform rating on Children's Place Retail Stores (Nasdaq: PLCE), price target $40.

Wedbush analyst says, "Following solid Q3 results, we suggest investors accumulate shares as we believe improved product offering and planned promotions during the holiday selling period will continue to resonate with consumers and could lead to topline gains and earnings growth. We also remain encouraged by the company's improved product offering in newborn and kid girl which could provide further topline opportunities for the upcoming peak holiday selling season. Further, easing comparisons and compelling valuation (11.2x our new F10 EPS estimate vs. historical average of 17.2x) suggest shares remain relatively attractive and as we believe F10 earnings power could be above current outlook given indications of favorable product costs and ongoing cost savings."

"Given our increased confidence in gross margin gains, we are increasing our Q4 EPS estimate to $1.07 from $0.97 prior vs. $0.72 LY...We are increasing our F09 EPS estimate to $2.70 from $2.60 prior and $2.24 LY, relative to consensus outlook of $2.64."

To see all the upgrades/downgrades on shares of PLCE, visit our Analyst Ratings page.

The Children's Place Retail Stores, Inc. operates as a specialty retailer of children's merchandise in North America.

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