Piper Jaffray Downgrades Conn's Inc. (CONN) to Neutral

Piper Jaffray downgraded Conn's Inc. (NASDAQ: CONN) from Overweight to Neutral with a price target of $8.50 (from $16.00), saying credit is not stabilizing and EPS will be pressured for awhile.

Analyst Peter Keith commented, "We are downgrading shares of CONN to Neutral and lowering our price target to $8.50 (0.5x price/book) from $16 (11x FY18E EPS). With shares now trading at a 4.5 year low, we are effectively throwing in the towel with significant egg on our face. Reasons for our downgrade include: (1) Improvements to the credit portfolio have surprisingly not yet materialized; (2) EPS will be significantly pressured for the foreseeable future as CONN goes through an investment period that coincides with tighter underwriting that will pressure sales growth; and (3) Valuation at 0.5x price/book now seems appropriate and could be sustained for awhile as it was in 2010/2011."

The firm cut FY 2017 EPS from $0.82 to ($0.38) and FY 2018 EPS from $1.41 to $0.21.

For an analyst ratings summary and ratings history on Conn's Inc. click here. For more ratings news on Conn's Inc. click here.

Shares of Conn's Inc. closed at $8.63 yesterday.

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• GMR Airports Infrastructure (GMRI:IN) PT Raised to INR99 at ICICI Securities
• Tata Motors Passenger Vehicles (TMPV:IN) PT Raised to INR375 at ICICI Securities