JP Morgan Maintains Neutral, $11 PT on Saks
JP Morgan reiterates its Neutral rating and $11 target price on Saks, Inc. (NYSE: SKS) on solid 3Q and expected pressure on margins due to guidance below Street expectations.
According to JPM, “Saks reported 3Q EPS of $0.11 – $0.02 above our estimate/Street. A standout versus peers, gross margin (versus SG&A for others) was the primary upside driver in the quarter (+157bps vs. JPM +95bps). Importantly, SKS resumed share repurchases in the quarter (first since 2Q08). Additionally, SKS is guiding 4Q EPS to $0.15 (on our math) – a penny below the Street, reflecting mid- to highsingle-digit comps (despite a +400 bps 3-year sequential expansion in compares), lower GPM (-50bps vs. JPM previously +65bps) given tougher compares/promotional environment and higher SG&A.”
SKS closed at $10.20 on Monday.
