Wells Fargo Upgrades Citi Trends (CTRN) to Outperform; Data Points Show Beginning of Comp Improvement

Wells Fargo upgraded Citi Trends (NASDAQ: CTRN) from Market Perform to Outperform, price target range $12-$13.

Analyst, Evren Kopelman, said, "We think that an improving brand/fashion mix and pricing structure, more off-price buying, an emerging fashion trend in color, improving unemployment for its customer, new management and lean SG&A & inventory could drive improvement in earnings in the next few quarters. Valuation is depressed relative to historical averages (0.2x EV/Sales, 4.5x EV/EBITDA) given the pressure on the business over the past 18 months in our view. We estimate net cash per share for year end 2012 of $5.27 (including long-term securities), or 49% of the market cap. As comp trends improve, we think CTRN could reaccelerate square footage growth and valuation can expand."

For an analyst ratings summary and ratings history on Citi Trends click here. For more ratings news on Citi Trends click here.

Shares of Citi Trends closed at $10.84 yesterday.

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