UPDATE: Stifel Nicolaus Upgrades Tilly's to Buy on Sales Momentum and Footage Growth

Stifel Nicolaus raised its rating on Tilly's TLYS from Hold to Buy and established a $20 price target. Stifel Nicolaus commented, "We are upgrading Tilly's to a Buy based on improved visibility for mid-teens square footage growth and continued sales momentum. New stores are performing above plan leading us to believe that the concept works well across a variety of markets and venues. In addition, we anticipate operating margin expansion over the next several years as the company leverages its fixed costs. Based on Tilly's attractive earnings growth potential we think the stock can trade at 20x our 2013 EPS estimate of $1.00, implying our $20 target price." Tilly's closed at $16.58 on Wednesday.