UPDATE: KeyBanc Capital Markets Upgrades The Bon-Ton Stores to Buy, Reiterates $15 PT

In a report published Wednesday, KeyBanc Capital Markets upgraded its rating on The Bon-Ton Stores

from Hold to Buy, and reiterated its $15.00 price target. KeyBanc noted, “While the risk profile remains high given high balance sheet leverage, we believe Bon-Ton Stores, Inc. (BONT-NASDAQ) presents one of the most compelling upside opportunities in our space; we are upgrading our rating on BONT to BUY (from HOLD). Under the leadership of new CEO Brendan Hoffman (joined BONT on February 7, 2012), we believe the Company has undergone a significant course correction in promotions/marketing (more targeted and easier to understand) and has reoriented its merchandising (see Exhibit 6). This has manifested itself in a change in the comp trajectory – comps have been positive for two sequential months. Our recent meeting with CEO Hoffman and CFO Keith Plowman confirms our belief that a sustainable operational turnaround has begun. In our view, the Company remains highly inexpensive at 0.4x 2012 EV/sales as compared to 0.7x EV/Sales for the department store peer group, and we see continued upside potential based on gradual operating improvement.” The Bon-Ton Stores closed on Tuesday at $9.70.