Nomura Securities Maintains a 'Neutral' on Family Dollar (FDO); Q4 Review

Nomura Securities maintains a 'Neutral' on Family Dollar Stores Inc. (NYSE: FDO) price target cut $3 to $53.

Nomura analyst, Aram Rubinson, said, "FDO’s $0.66 EPS for FQ4 (Aug) beat the Street by $0.03 and came in $0.07 ahead of our model. Better comps and a clamp down on SG&A drove the upside. We continue to find the severe gross margin compression and significant SG&A leverage of the last two quarters to be at odds with a store investment and renovation program. We believe that private-label initiatives need to begin offsetting a consumables mix shift and margin compression in stronger fashion. Our F12 EPS estimate is now $0.10 lower at $3.35 vs. $3.50–3.75 guidance. We lowered our price target to $53 from $56, which assumes a 7.0x multiple on F13E EBITDA."

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 $53.31 yesterday.

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