Brean Murray Initiates J. Crew Group (JCG) with a Buy
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Brean Murray initiates coverage on J. Crew Group (NYSE: JCG) with a Buy rating and a $40 price target.
The firm said, "Our $40 target price translates to 19.5x our 2009 EPS forecast, a slight (and in our view, well-deserved) premium to our long-term growth rate estimate, but materially below historic forward valuations. We firmly believe that there is a wide gulf between what we view as 'trades' versus 'investments' in the retailing sector. We believe retail investments entail a highly differentiated value-added concept with a material level of designer-driven looks and a deep emphasis on operations and minimizing inventory overhang to reduce the impact of inevitable fashion misses; we view J. Crew as a classic example of an 'investment'.â€
Also, with JCG off 41% since its 52 week high, the firm believes now is the right time to utilize weakness and become aggressive on JCG.
J. Crew Group, Inc. operates as a multichannel specialty retailer of women's and men's apparel, shoes, and accessories in the United States.
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