Jefferies More Optimistic on Guess? (GES) Following Investor Dinner; Reiterates Hold

Jefferies maintains a Hold rating and $21.00 price target on Guess (NYSE: GES) following an investor dinner with management. Analyst Randal Konik came away from the event more optimistic about business trends.

Konik commented, "Yesterday, we hosted an investor dinner with GES mgmt in NYC. We came away feeling more optimistic about the business as trends in Europe stabilize and the company takes proactive measures to: 1) rationalize the store fleet domestically in order to match lowered demand and 2) improve design and product, which should better stabilize the overall gross margin profile. Overall, we feel that a floor is being set in the fundamental picture of this company."

Konik also added, "it appears to us that the company's current revenue projections are achievable and margin expectations are likely beatable. We see particular fundamental upside opportunity in Europe and the licensing segment, while the US remains a wild-card. What’s really going to matter for potential reacceleration in this story is the US and whether demand can turn positive or more importantly, whether traffic can improve with a more rationalized store fleet, better inventory control and an improved product assortment. We need more visibility around domestic demand trends before getting more bullish on the stock. In the meantime, our view on GES as a fundamental story is clearly getting more constructive."

For an analyst ratings summary and ratings history on Guess click here. For more ratings news on Guess click here.

Shares of Guess closed at $19.70 yesterday.

You May Also Be Interested In

• Jefferies Downgrades Enphase Energy (ENPH) to Hold, 'Still Muddling Through'
• Webster Financial (WBS) PT Lowered to $58 at Keefe, Bruyette & Woods
• Invesco (IVZ) PT Lowered to $19.50 at TD Cowen