UBS Resumes Coverage on Talbots (TLB) at Neutral; Going Back to the Well on Product

UBS resumes coverage on Talbots (NYSE: TLB) with a Neutral. PT $3.25.

UBS analyst says, "We view TLB as a “wait-and-see” story with broad-based product disappointment in 2Q (has led to a new low in TLB credit card penetration), the lack of design leadership/vision, high invent ories, and tightened liquidity as key concerns. TLB’s investment in marketing, upscale outlets, and store refreshes are longer-term catalysts, but not enough to offset customer losses and negative traffic trends."

"Our estimates: Q3 $(0.14), ’11 $(0.83). Our $3.25 PT is based on 5x our ’13 EV/EBITDA. A Black Skies scenario derives a downside valuation of $1.25."

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

Shares of Talbots closed at $2.62 yesterday.

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