Janney Capital Upgrades Pacific Sunwear of California (PSUN) to Buy

Janney Capital analyst Adrienne Yih-Tennant upgraded Pacific Sunwear of California (NASDAQ: PSUN) from Neutral to Buy and raised her fair value estimate to $3.50 (from $3.00), although the firm said the stock is not a stock for the faint of heart.

Yih-Tennant sees management’s strategy resonating across marketing, visual merchandising and product. She also notes the company making sequential and consistent improvement in comp and margin expansion. It is, according to the analyst, one of few retailers posting positive comps with tight inventory control and expanding margins.

Q3 comps rose 4%, versus Retail Metrics consensus of 2%. Comparable store sales in the men’s business increased 6%. Also, the women’s business showed sequential improvement.

The firm's checks show controlled promos and steady progress towards profitability.

Yih-Tennant notes Pacific Sunwear of California is a small-cap, beta idea and ideally for risk tolerant investors only.

For an analyst ratings summary and ratings history on Pacific Sunwear of California click here. For more ratings news on Pacific Sunwear of California click here.

Shares of Pacific Sunwear of California closed at $2.29 yesterday.

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