Piper Jaffray Reiterates OW Rating, $36 PT On RUE

Piper Jaffray is reiterating its Overweight rating and $36 PT on shares of Rue 21 RUE.

“FQ4 sales increased 22% on a +1.5% comp, generally in line with expectations, but FQ1 guidance of +LSD to +MSD comps and increasing AURs point to accelerating conversion,” Piper Jaffray writes. “FQ4 EPS of $0.44 beat PJC and consensus estimates by $0.01/share and full-year EPS increased +22% to $1.21.

“Opportunities via 110 new store openings, 35 etc! store conversions, high-teens square footage growth, and an increasing mix of higher margin accessories and footwear reinforce our positive view on the company's relative performance. We reiterate our Overweight rating and our $36 price target is based on 25x FY12E EPS of $1.43.”

Rue 21 closed Tuesday at $31.75.