UPDATE: Conn's Inc. (CONN) Surges on New 'Buy' from Canaccord Genuity, Sees 63% Upside

October 1, 2012 7:15 AM EDT
Get Alerts CONN Hot Sheet
Price: $11.05 -0.9%

Rating Summary:
    4 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 1 | Down: 2 | New: 3
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(Updated - October 1, 2012 12:09 PM EDT)

Shares of Conn's Inc. (NASDAQ: CONN) are surging 8 percent higher Monday after Canaccord Genuity initiates research coverage on the stock with a Buy rating and aggressive $36 price target, suggesting 63 percent upside from Friday's close.

The firm said the company is in the early stages of growth with new management creating several catalysts.

"The company's in-house credit offering gives it a significant competitive advantage as it drives sales by financing Conn's lower income core customer and provides a sizable profit engine," the analyst said. "In Q2, nearly 90% of total sales were financed, and Conn's generated almost half of total operating income from this segment. Management has taken steps to improve the overall credit portfolio, and it has refocused Conn's real estate strategy. The company is reaccelerating square footage growth, opening new stores for the first time in two years, and expanding floor space for the higher-margin furniture and mattress segment."

Canaccord expect annual square footage growth topping 20% in FY13-FY14E. They said the store base will increase at a five-year CAGR of 12%, the highest rate of growth of any retailer in their coverage.

For an analyst ratings summary and ratings history on Conn's Inc. click here. For more ratings news on Conn's Inc. click here.

Shares of Conn's Inc. closed at $22.05 yesterday.

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