UBS Maintains a 'Buy' on Talbots (TLB); FY11 A Transition Year; Low Expectations, Continue to See Longer-Term Catalysts

UBS maintains a 'Buy' on Talbots (NYSE: TLB), PT lowered from $10 to $8.

UBS analyst says, "Attractive risk/reward for patient, long-term investors - We view FY11 as a transitional year as TLB works through heavy inventories, makes product/ store segmentation adjustments, implements new systems, tweaks its marketing strategies and remodels stores, all of which should support net new customer acquisition and improved profit ability longer-term. With Street expectations much lower for 2011, and with merchandising issues in 2H10 having clouded any progress, we see the opportunity for improvement in 2H11 and beyond, and continue to view TLB as attractive for patient, long-term investors...Lowering our Q1 est to $0.06 from $0.13, FY11 to $0.28 from $0.52. Adjusting our PT to $8 from $10 based on 15x our ’12 est of $0.54 (previously 13x $0.79)."

For more ratings news on Talbots click here and for the rating history of Talbots click here.

Shares of Talbots closed at $5.50 yesterday.

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