FBR Capital Reiterates an 'Outperform' on Talbots (TLB); Raises Estimates & PT

October 7, 2009 7:19 AM EDT

FBR Capital reiterates an Outperform rating on Talbots (NYSE: TLB), raises price target to $13.

FBR analyst says, "On October 6, we traveled with Talbots' management, including CEO Trudy Sullivan, CFO Michael Scarpa, and SVP, IR Julie Lorigan. Following our meetings, we reiterate our Outperform rating and are increasing our 12-month price target to $13, as we believe the progress is highly encouraging and they are on the right path to recovery. On September 9, the company posted a 2Q09 beat and guided 3Q09 above the Street. Store checks continue to show strong commitment to inventory control and signs that sales are improving (albeit, still negative). Additionally, fall product continues to improve with each new flow. We believe the product looks trend-right, and controlled promotions bode well for margins and improved full-price sales...We recommend shares for value investors with a multiyear time horizon, as well as investors who can tolerate more risk with an earlier stage turnaround."

"Our FY09 estimate goes from an LPS of ($1.53) to ($1.49); FY10 rises from ($0.38) to ($0.25). We are introducing our FY11 EPS estimate of $0.41. Our price target increases from $8 to $13, which represents an EV/sales multiple of 0.9x on FY10 sales of $1.2 billion."

To see more analyst ratings on TLB Click Here.

The Talbots, Inc., together with its subsidiaries, operates as a specialty retailer and direct marketer of women's apparel, shoes, and accessories.

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