Men's Wearhouse (MW) PT Cut to $16 at Jefferies - 'Don't Bank On a Quick Fix Here'
Jefferies maintained a Hold rating on The Men's Wearhouse, Inc. (NYSE: MW), and cut the price target to $16.00 (from $32.00), as visibility on turnaround becomes cloudy. MW met recently lowered 3Q guidance, but Jos Bank's steep 35% comp decline 4QTD is outpacing already morose expectations for a 20-25% decline, and continuing to overshadow positive performance out of the legacy bizs. Jefferies credits management's aggressive efforts to create a better, healthier JOSB by infusing better merchandise like the 1905 collection, updating marketing and selling tactics, and pulling away from corrosive BOG3 promos. Unfortunately, the customer isn't biting yet.
Analyst Edward Plank commented, "With Jos Bank's comps tracking down a worse than expected 35% QTD, visibility on the brand's turnaround has worsened considerably, and the road ahead is apt to remain rocky for a prolonged period, in our view. Optically, the stock appears inexpensive, but we see further risk to earnings estimates going forward, and with no fundamental catalysts to jump start the story, we prefer to remain sidelined until better clarity emerges. Maintain Hold, PT to $16."
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Shares of The Men's Wearhouse, Inc. closed at $15.27 yesterday.