KeyBanc Maintains a 'Hold' on Bon-Ton Stores (BONT); New Management Flexing its Muscles

August 17, 2012 8:49 AM EDT Send to a Friend
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Price: $9.41 -0.21%

Rating Summary:
    2 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 28 | New: 20
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KeyBanc maintains a 'Hold' on Bon-Ton Stores (NASDAQ: BONT).

Analyst, Edward Yruma, said, "New CEO Brendan Hoffman seems to be wasting little time in making his mark. The Company quickly moved to course correct adverse decisions in merchandising, has made efforts to refocus promotions, all while making surgical SG&A reductions ($40 million annualized reductions, $30 million in FY12). 2Q12 adjusted EPS of ($1.88) was lower than our ($1.78) estimate, but EBITDA of $11.1 million came in ahead of our estimate. The Company also bought itself some wiggle room within the capital structure via the recent debt exchange offer. Other than a modest shift in the comp trend (the +0.1% comp was the first positive quarterly comp since 4Q10), the moves have not yet manifested themselves in better operating performance. That said, we are turning increasingly optimistic and believe that, for an investor with high risk tolerance, the 0.4x 2012 EV/Sales valuation could look intriguing as compared to the 0.7x EV/Sales of the department stores peer group." (FY12 EPS lowered from (0.52) to (0.55))

For an analyst ratings summary and ratings history on Bon-Ton Stores click here. For more ratings news on Bon-Ton Stores click here.

Shares of Bon-Ton Stores closed at $7.28 yesterday.


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