Wedbush Raises Price Target on Select Comfort (SCSS) to Reflect New Outlook
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Price: $32.50 --0%
Rating Summary:
3 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 1
Rating Summary:
3 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 1
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Wedbush is reiterating its Neutral rating on shares of Select Comfort (NASDAQ: SCSS) and is raising its price target from $18 to $20 following the release of its Q3 results.
The company reported EPS of $0.31 for the quarter as comps rose 26 percent, topping the 16 percent increase last year. Gross margin rose 50 bps to 63 percent while operating margin increased 280 bps to 13.3 percent.
Management increased its FY11 EPS guidance from $0.90-$96 to $0.99-$1.01 as comps are expected to be between 20-25 percent for Q4. Select Comfort also increased its long-term EPS growth expectation to at least 20 percent by 2015, up from 15-20 percent previously. Operating margins are also expected to be at least 15 percent by 2015.
Wedbush is raising its Q4 and FY11 EPS estimates from $0.19 and $0.95 to $0.23 and $1.03 due to the company's recent performance and its new line of adjustable air pillows which are being introduced to help drive Holiday gift-giving and customer purchasing during Q4. The firm is also raising its FY12 estimate from $1.13 to $1.25 due to the company's new long-term outlook.
An analyst at Wedbush comments, "We expect SCSS to continue benefitting from higher average sales per store, leveraging its attractive model. Nevertheless, given the pace of share price appreciation, we believe the positives have been baked into the stock. Although we remain on the sidelines for now, we believe SCSS should remain a successful competitor in the specialty bedding space and should continue to gain share with its unique product proposition from the innerspring players."
For more ratings news on Select Comfort click here and for the rating history of Select Comfort click here.
Shares of Select Comfort closed at $16.12 yesterday.
The company reported EPS of $0.31 for the quarter as comps rose 26 percent, topping the 16 percent increase last year. Gross margin rose 50 bps to 63 percent while operating margin increased 280 bps to 13.3 percent.
Management increased its FY11 EPS guidance from $0.90-$96 to $0.99-$1.01 as comps are expected to be between 20-25 percent for Q4. Select Comfort also increased its long-term EPS growth expectation to at least 20 percent by 2015, up from 15-20 percent previously. Operating margins are also expected to be at least 15 percent by 2015.
Wedbush is raising its Q4 and FY11 EPS estimates from $0.19 and $0.95 to $0.23 and $1.03 due to the company's recent performance and its new line of adjustable air pillows which are being introduced to help drive Holiday gift-giving and customer purchasing during Q4. The firm is also raising its FY12 estimate from $1.13 to $1.25 due to the company's new long-term outlook.
An analyst at Wedbush comments, "We expect SCSS to continue benefitting from higher average sales per store, leveraging its attractive model. Nevertheless, given the pace of share price appreciation, we believe the positives have been baked into the stock. Although we remain on the sidelines for now, we believe SCSS should remain a successful competitor in the specialty bedding space and should continue to gain share with its unique product proposition from the innerspring players."
For more ratings news on Select Comfort click here and for the rating history of Select Comfort click here.
Shares of Select Comfort closed at $16.12 yesterday.
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