MKM Partners Q2 Preview on Fred's Inc. (FRED): Expect In-line Results; Shares Overvalued
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Price: $0.13 --0%
Rating Summary:
2 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
Rating Summary:
2 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
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MKM Partners maintains a 'Neutral' on Fred's Inc. (NASDAQ: FRED) price target of $13.00.
Analyst, Patrick McKeever, said, "Sees Q2 EPS of $0.18 (ex-items)...We expect a higher gross margin on strength in higher-margin generic prescriptions, partially offset by an adverse mix of general merchandise sales. We look for SG&A de-leverage from the weak sales, store closing costs, inventory reserves, promotional spending and expanded pilots. We also expect some 1x expenses from the store closings."
"We expect weak top-line trends to continue through 2H12, as Fred’s core customer continues to struggle financially and as the competition (mass, dollar stores, drug stores) remains intense. We view the stock as overextended at its current valuation and advise taking profits."
For an analyst ratings summary and ratings history on Fred's Inc. click here. For more ratings news on Fred's Inc. click here.
Shares of Fred's Inc. closed at $15.80 yesterday.
Analyst, Patrick McKeever, said, "Sees Q2 EPS of $0.18 (ex-items)...We expect a higher gross margin on strength in higher-margin generic prescriptions, partially offset by an adverse mix of general merchandise sales. We look for SG&A de-leverage from the weak sales, store closing costs, inventory reserves, promotional spending and expanded pilots. We also expect some 1x expenses from the store closings."
"We expect weak top-line trends to continue through 2H12, as Fred’s core customer continues to struggle financially and as the competition (mass, dollar stores, drug stores) remains intense. We view the stock as overextended at its current valuation and advise taking profits."
For an analyst ratings summary and ratings history on Fred's Inc. click here. For more ratings news on Fred's Inc. click here.
Shares of Fred's Inc. closed at $15.80 yesterday.
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