Mizuho Securities Remains Sidelined on Francesca's (FRAN) Following In-Line 4Q
Mizuho Securities reiterated a Neutral rating and $17.00 price target on Francesca's Holdings (NASDAQ: FRAN) following the company's 4Q earnings report. FRAN reported EPS of $0.35, vs. $0.21 LY, in-line with consensus’ estimate of $0.35.
Analyst Betty Chen commented, "We remain sidelined on FRAN shares despite in-line 4Q results and FY16 guidance that suggests ongoing momentum in core categories including apparel, gifting, and jewelry. Importantly, 1Q guidance points to moderated topline growth (with tough compares in the horizon) while SG&A growth is expected to outpace sales given on-going investment in IT, omni-channel, and further store growth. With erratic mall traffic, we fear topline variability and the inability to pull back on heavy spending may result in a near-term earnings disappointment against lofty expectations and the current premium valuation."
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Shares of Francesca's Holdings closed at $17.34 yesterday.