JP Morgan Comments On Signet Jewelers Following Management Meetings

JP Morgan recently hosted several investor meetings in NYC with Signet Jewelers (NYSE: SIG) CEO, Mike Barnes, CFO, Ron Ristau and IR Tim Jackson and came away very upbeat on how management plans to evolve the company longer-term. Exclusive brands now make up ~25% of the business, while total brand penetration is now > 50%. A rapidly growing bridal business is bringing in steady traffic from a younger demographic, and the overarching theme is that this is no longer a highly commoditized, older generation focused business model.

The business is evolving, and we believe is well positioned to continue taking share in what is now a highly rationalized playing field. The key topics that seem to be on investors' minds are what are the plans on capital re-deployment, what is happening with SG&A growth, how will cost inflation impact the P&L this year and where can margins go over time.

JP Morgan continues to believe that, backed by its evolving business model SIG represents a very attractive market share story, as they look very well positioned to continue taking share in an up-trending industry for the foreseeable future. Between their scale, in-house credit operations ad balance sheet strength, JP Morgan sees a number of ways that SIG shares can continue to move higher from here. JP Morgan reiterates its OW rating and is raising estimates and its PT to $52 from $50.

SIG closed Friday at $46.16