Jefferies Trims Price Target & Estimates on Quiksilver (ZQK), Strong Among the Sector
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Price: $0.46 --0%
Rating Summary:
1 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies si reaffirming its Buy rating on shares of Quiksilver (NYSE: ZQK) while lowering its price target by $1 to $4.50.
The firm reports that the U.S. looks to be the company's strongest geography and Asia sales are expected to continue to be weak. European sales, typically the company's strongest margin geography, are the company's greatest risks but due to EBIT contribution things do not look good.
The company's shares have been directly miss represented due to poor results being reported from the likes of Billabong and PacSun (Nasdaq: PSUN) in recent weeks. Jefferies notes that some differences include unlike Billabong, which has been actively involved in M&A, ZQK has been divesting non-core assets and reducing its net debt. PacSun is also a US retailer, a geography where ZQK has had proven success over the past several quarters.
An analyst at Jefferies comments, "We remain at a Buy given upward near-term EPS bias vs. consensus and attractive valuation. However, any evidence of deteriorating conditions in Europe and/or US would lead us to revisit our rating. This is, after all, a top-line story predicated on re-accelerated sales growth and reinvestment in support of a high-quality portfolio of globally recognized brands."
To reflect a more conservative sales environment, the firm cut its 2011 and 2012 EPS estimates from $0.32 and $0.46 to $0.29 and $0.41. Jefferies also lowered its EBITDA estimates from $211 million and $238 million to $206 million and $229 million.
For more ratings news on Quiksilver click here and for the rating history of Quiksilver click here.
Shares of Quiksilver closed at $3.79 yesterday.
The firm reports that the U.S. looks to be the company's strongest geography and Asia sales are expected to continue to be weak. European sales, typically the company's strongest margin geography, are the company's greatest risks but due to EBIT contribution things do not look good.
The company's shares have been directly miss represented due to poor results being reported from the likes of Billabong and PacSun (Nasdaq: PSUN) in recent weeks. Jefferies notes that some differences include unlike Billabong, which has been actively involved in M&A, ZQK has been divesting non-core assets and reducing its net debt. PacSun is also a US retailer, a geography where ZQK has had proven success over the past several quarters.
An analyst at Jefferies comments, "We remain at a Buy given upward near-term EPS bias vs. consensus and attractive valuation. However, any evidence of deteriorating conditions in Europe and/or US would lead us to revisit our rating. This is, after all, a top-line story predicated on re-accelerated sales growth and reinvestment in support of a high-quality portfolio of globally recognized brands."
To reflect a more conservative sales environment, the firm cut its 2011 and 2012 EPS estimates from $0.32 and $0.46 to $0.29 and $0.41. Jefferies also lowered its EBITDA estimates from $211 million and $238 million to $206 million and $229 million.
For more ratings news on Quiksilver click here and for the rating history of Quiksilver click here.
Shares of Quiksilver closed at $3.79 yesterday.
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