Barclays Maintains an 'Equalweight' on Family Dollar Stores (FDO); Sales Should Improve, Gross Margin Shouldn't
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Price: $79.39 --0%
Rating Summary:
0 Buy, 19 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
Rating Summary:
0 Buy, 19 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
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Barclays maintains an 'Equalweight' on Family Dollar Stores Inc. (NYSE: FDO), PT $46.
Barclay analyst says, "The environment for FDO's core, low income customer remains very difficult. Given their fixed budgets, they have little ability to absorb price increases without reallocating their spending. As a result, we believe FDO and its peers are doing everything in their power to delay or not fully pass through higher costs. While this should keep sales strong, it will likely come partially at the expense of gross margin. FDO also recently expanded its assortment of consumables and increased its use of promotions, both of which should help sales but hurt gross margin. We continue to believe that our EW rating is appropriate, as we expect the presence of activist investors, Trian Group and Pershing Square Capital, to keep a floor on the stock but we do not see upside from here."
"We are lowering our 4Q11 EPS to $0.64 from $0.68, our FY11 to $3.10 from $3.18, and our FY12 to $3.66 from $3.76 to reflect gross margin pressures that we expect to continue in the near term."
For more ratings news on Family Dollar Stores Inc. click here and for the rating history of Family Dollar Stores Inc. click here.
Shares of Family Dollar Stores Inc. closed at $53.44 yesterday.
Barclay analyst says, "The environment for FDO's core, low income customer remains very difficult. Given their fixed budgets, they have little ability to absorb price increases without reallocating their spending. As a result, we believe FDO and its peers are doing everything in their power to delay or not fully pass through higher costs. While this should keep sales strong, it will likely come partially at the expense of gross margin. FDO also recently expanded its assortment of consumables and increased its use of promotions, both of which should help sales but hurt gross margin. We continue to believe that our EW rating is appropriate, as we expect the presence of activist investors, Trian Group and Pershing Square Capital, to keep a floor on the stock but we do not see upside from here."
"We are lowering our 4Q11 EPS to $0.64 from $0.68, our FY11 to $3.10 from $3.18, and our FY12 to $3.66 from $3.76 to reflect gross margin pressures that we expect to continue in the near term."
For more ratings news on Family Dollar Stores Inc. click here and for the rating history of Family Dollar Stores Inc. click here.
Shares of Family Dollar Stores Inc. closed at $53.44 yesterday.
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