Men's Wearhouse (MW) PT Cut to $16 at Mizuho Securities as JAB Deceleration Clouds Visibility

Mizuho Securities maintained a Neutral rating on The Men's Wearhouse, Inc. (NYSE: MW), and cut the price target to $16.00 (from $30.00), as rapid deceleration at JAB clouds visibility around topline and margins. With limited visibility to the cause of the rapid traffic decline, Mizuho is uncertain when JAB comps will stabilize and the dimensions of the new LT business model. Encouragingly, the legacy’s businesses remain strong which should provide some comfort around management’s ability to drive sales against difficult compares next year.

Analyst Betty Chen commented, "We are lowering our estimates and PT to $16 (from $30) as rapid deceleration at JAB clouds visibility around topline and margins. While we are encouraged by cost synergies that remain on track as well as strength of the core business lapping tough compares, we remain concerned current efforts to adjust promotions/marketing/selling tactics at JAB may take much longer to reengage its core and new customers. In the meantime, the corresponding margin deleverage caused by JAB and the suspended debt repayment will impact earnings while management evaluates strategies to further cut costs."

For an analyst ratings summary and ratings history on The Men's Wearhouse, Inc. click here. For more ratings news on The Men's Wearhouse, Inc. click here.

Shares of The Men's Wearhouse, Inc. closed at $18.57 yesterday.

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