UPDATE: Goldman Sachs Downgrades Express Inc. (EXPR) to Sell

Goldman Sachs downgraded Express Inc. (NYSE: EXPR) from Neutral to Sell with a price target of $15.00 (from $20.00), suggesting downside of 14%. Analyst Lindsay Drucker Mann thinks the company will have difficulty given intensifying industry pressures and tougher comparisons.

"EXPR’s solid execution off of a depressed FY14 earnings base has driven strong fundamental and share price performance year-to-date (EXPR +17% vs S&P 500 +1%). Going forward, with year-ago comparisons getting tougher, and with industry headwinds intensifying into holiday, we’ve grown increasingly concerned that business momentum will slow as structural pressures could overwhelm near-term execution tailwinds," said Drucker Mann.

The analyst added, "Our concerns for EXPR are based on structural pressures impacting mall-based fashion apparel retailers. These challenges are exacerbated by an increasingly difficult backdrop heading into holiday: (1) Mall-based specialty retailers facing secular headwinds. These include declining mall traffic (down msd YTD), ecommerce adoption, and the encroachment of lower cost competition. (2) EXPR more exposed than others to industry risks. EXPR has a large mall-based store fleet, with exposure to lower productivity malls, where traffic headwinds have been particularly acute. In addition, EXPR’s target customer and product aesthetic has significant overlap with fast fashion competitors like Forever 21, H&M, Zara, and Primark. (3) Margins appear vulnerable. EXPR is running at 8% EBIT margins, at the upper end of its peer group range of 4-11%."

For an analyst ratings summary and ratings history on Express Inc. click here. For more ratings news on Express Inc. click here.

Shares of Express Inc. closed at $16.99 yesterday.

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