FBR Capital Upgrades Pacific Sunwear (PSUN) to Outperform; Increases Q3 Comp Estimates

October 13, 2009 6:59 AM EDT

FBR Capital upgrades Pacific Sunwear (Nasdaq: PSUN) to Outperform.

FBR analyst says, "We are upgrading shares of Pacific Sunwear based on (1) product focus returning to an emphasis on brands, (2) controlled inventory, (3) guidance and consensus that we believe could be sufficiently conservative, and (4) opportunities in the company's store base to close underperforming stores. Our store checks during the quarter have shown an increase in branded product, with a return to better showcasing "heritage" brands as well as introducing newer brands. We also noted less breadth and depth of markdown than last year."

"Due to our belief that the quarter is sequentially improving, we are increasing our 3Q09 comp estimate from -20.5% to -17% and our LPS from ($0.19) to ($0.15). Our FY09 estimate goes from ($0.64) to ($0.60); our FY10 estimate goes from ($0.19) to ($0.15). Our price target increases from $6 to $9, which represents an EV/sales multiple of 0.5x our FY10 sales estimate of $1 billion."

To see more analyst ratings on PSUN Click Here.

Pacific Sunwear of California, Inc., together with its subsidiaries, provides casual apparel, related accessories, and footwear for young men and juniors/girls.

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