UPDATE: Brean Capital Upgrades Zumiez, Inc. (ZUMZ) to Buy

(Updated - February 4, 2016 1:06 PM EST)

Brean Capital upgraded Zumiez, Inc. (NASDAQ: ZUMZ) from Hold to Buy with a price target of $24. Yesterday Zumiez issued January results.

Analyst Liz Pierce said, "Positive comp in Junior’s gives us confidence that product initiatives are working and will lead to positive comps in other categories sooner versus later. Although ZUMZ faces 2 more months of difficult compares, we view the lift in Junior’s, which is one of the most competitive categories, as a positive sign, reflecting the strength of the company’s vendor relationships and its ability to move quickly. Thus, even though we see no let-up in sector challenges, we believe the company is better positioned than it was a year ago due to its omni-channel and product initiatives."

"Moreover, with the stock trading at 14.8x and 12.1x our FY16 and FY17 EPS estimates of $1.23 and $1.51 respectively, a discount to our estimated 3-year CAGR of 18%, we believe the valuation is compelling. Accordingly, we are upgrading to a Buy rating and establishing a target price of $24; our $24 TP is based on a multiple of 19.5x our FY16 EPS estimate of $1.23 and PEG ratio of 1.1x," added the analsyt.

For an analyst ratings summary and ratings history on Zumiez, Inc. click here. For more ratings news on Zumiez, Inc. click here.

Shares of Zumiez, Inc. closed at $18.20 yesterday.

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