Wells Fargo Downgrades Warnaco Group (WRC) to Market Perform; Lowering Estimates

Wells Fargo downgraded Warnaco Group (NYSE: WRC) from Outperform to Market Perform, price target range cut to $47-$52 from $54-58.

Wells analyst says, "We are downgrading WRC as we believe the weakness in women's jeanswear in the U.S. & Southern Europe that the company experienced in Q2 has continued into the H2 2011. In addition, the macroenvironment is more uncertain in the U.S. & Europe (WRC has high exposure to Southern Europe & the U.K., where there has been more macro pressure) and currency translation could be a negative going forward given recent currency moves. Lastly, men's moderate sportswear has been weak across the industry and could impact Chaps in H2 2011. We think the stock is already pricing in some of these factors. We are lowering our 2011E EPS to $3.90 from $4.00 (guidance is $4.00-4.15) and our 2012E EPS to $4.30 from $4.50."

For more ratings news on Warnaco Group click here and for the rating history of Warnaco Group click here.

Shares of Warnaco Group closed at $48.49 yesterday.

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