Piper Jaffray Downgrades G-III Apparel (GIII) to Neutral Following DKNY Deal

Piper Jaffray downgraded G-III Apparel (NASDAQ: GIII) from Overweight to Neutral with a price target of $48.00, citing additional viability risk following the announced DKNY acquisition.

Analyst Erinn Murphy commented, "While we remain long-term supporters of the GIII business model and the management team's ability to navigate in a variety of environments, we struggle to find the upside support to the stock at present following the company's announced DKNY acquisition. While we are not changing our estimates or our $48 PT, we are stepping to the sidelines and moving our rating to Neutral. from Overweight To be clear, we believe the stock will go through a period of digestion in the next 6-12 months as we gain further detail on the DKNY deal. We estimate a range of scenarios in the note but the bottom line is the deal could be dilutive by $0.20-$0.50 in 2017 (FY18) and accretive by $0.10-$0.20 in FY19. Simply stated, the growth thesis we were banking on for 2017 is being pushed out, and a transitional year in 2016 is turning into another transitional year in 2017."

For an analyst ratings summary and ratings history on G-III Apparel click here. For more ratings news on G-III Apparel click here.

Shares of G-III Apparel closed at $42.95 yesterday.

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