Piper Jaffray Remains Sidelined After Guess? (GES) Releases Weak Guidance

Piper Jaffray reiterated a Neutral rating on Guess (NYSE: GES), and cut the price target to $15.00 (from $18.00), following the company's 4Q. While Q4 EPS was in line with expectations, FY17 guidance came in well below Piper's $1.03 estimate at $0.65-$0.85 for the year. Guidance implies earnings are 2H weighted with a net-loss/share of ($0.20)-($0.17) expected in Q1.

Analyst Erinn Murphy commented, "We are reiterating our Neutral rating on shares of GES and we are lowering our PT to $15, based on 13x our FY17 EPS + cash. Shares will likely open under pressure and we would not be buyers on weakness. While Q4 EPS was in line with expectations, FY17 guidance came in well below our $1.03 estimate at $0.65-$0.85 for the year. Guidance implies earnings are 2H weighted with a net-loss/share of ($0.20)-($0.17) expected in Q1. Guess noted the 1H of this year is expected to be a transition period as the company works on its key five initiatives. Importantly, the company provided 2018 (FY19) financial targets of $3B in revenue, 200 bps EBIT expansion and 20% EPS CAGR. We believe these targets may prove lofty. We are lowering our FY17 EPS estimate to $0.72 vs. $1.03 prior."

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 $21.32 yesterday.

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