Oppenheimer Reiterates Outperform on Gymboree (GYMB)
Oppenheimer is out with a research report this morning, where it reiterates its Outperform rating on Gymboree Corp. (NASDAQ: GYMB); it has a $52.00 price target on the stock.
The Oppenheimer analysts cited the company’s recent earnings report, which was better than the consensus due to better gross margins and buying and occupancy deleveraging. Revenues rose 3%.
The analysts said that the slow start to the back-to-school season reflects the fact that customers are making purchases closer to the time they need items. They noted that companies need to proactively adjust promotions and markdowns accordingly to maintain market share.
As for valuation, the analysts noted, “Reiterate Outperform rating and $52 12-18 month price target, which assumes GYMB should trade at 12x our forward estimate of $4.34, representing a discount to its historic average of 14x. Despite near-term promotional pressures, we're encouraged by positive full-priced response at growth vehicles Crazy 8 and Janie & Jack and the boys turnaround at Gymboree.”
