Mizuho Securities Encouraged by Improving Retail Trends for Guess? (GES); Raises Price Target to $19

Mizuho Securities reiterated a Neutral rating on Guess (NYSE: GES), and raised the price target to $19.00 (from $17.00), to reflect SG&A control and modest improvements to the underlying European and Asian businesses. 3Q EPS of $0.15 beat consensus’ $0.11 estimate. After stripping out the ~$0.40 FX impact to FY15 EPS, Mizuho was encouraged by improving 3Q retail comp trends of +LDD in Europe driven by Italy and Iberia and +MSD comp guidance in 4Q.

Analyst Betty Chen commented, "We have raised our estimates and PT to $19 (from $17) to reflect SG&A control and modest improvements to the underlying European and Asian businesses. Although we applaud GES’ ability to control opex and stabilize the European business, we believe execution on CEO Herrero’s vision to improve product, supply chain, and expand the company’s geographic reach could take time. With inconsistent sales and margins across the segments on a quarter to quarter basis, we believe revitalizing the brand and returning to growth may prove difficult in the near-term and view shares as fully valued."

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 $19.54 yesterday.

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