Needham & Company Maintains a 'Strong Buy' on Destination Maternity (DEST); Sept Sales Show Improvement, But At Cost of Gross Margin
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Price: $0.11 --0%
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Strong Buy' on Destination Maternity (NASDAQ: DEST) price target of $24.00.
Needham analyst says, "DEST reported that sales in September showed improvement over the trends of recent months, but that markdown activity had also increased, pressuring gross margins. As a result, EPS for F4Q (Sept.) are now expected near the bottom of the range of $0.18-$0.28 which management had indicated in late July. We were expecting $0.28. We have lowered our F4Q and FY2011 EPS estimates by $0.09, but have left 2012 unchanged. We have also lowered our price target, partly as a result of lower earnings forecasts for 2013, and also assuming more conservative multiples. This still implies, however, that we see over 65% upside from current levels, so we are maintaining our rating."
"Part of the sales improvement was driven by greater discounting and markdowns, which the company said pressured gross margin. As a result, EPS in 4Q were at the low end of its guidance range of $0.18 to $0.28. We have lowered our 4Q EPS estimate from $0.28 to $0.19." (Needham lowers FY11 EPS Estimate from $1.83 to $1.74)
For more ratings news on Destination Maternity click here and for the rating history of Destination Maternity click here.
Shares of Destination Maternity closed at $14.65 yesterday.
Needham analyst says, "DEST reported that sales in September showed improvement over the trends of recent months, but that markdown activity had also increased, pressuring gross margins. As a result, EPS for F4Q (Sept.) are now expected near the bottom of the range of $0.18-$0.28 which management had indicated in late July. We were expecting $0.28. We have lowered our F4Q and FY2011 EPS estimates by $0.09, but have left 2012 unchanged. We have also lowered our price target, partly as a result of lower earnings forecasts for 2013, and also assuming more conservative multiples. This still implies, however, that we see over 65% upside from current levels, so we are maintaining our rating."
"Part of the sales improvement was driven by greater discounting and markdowns, which the company said pressured gross margin. As a result, EPS in 4Q were at the low end of its guidance range of $0.18 to $0.28. We have lowered our 4Q EPS estimate from $0.28 to $0.19." (Needham lowers FY11 EPS Estimate from $1.83 to $1.74)
For more ratings news on Destination Maternity click here and for the rating history of Destination Maternity click here.
Shares of Destination Maternity closed at $14.65 yesterday.
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