UPDATE: Citigroup Initiates Zales at Buy on Comps Momentum

Citigroup initiated coverage on Zales (NYSE: ZLC) with a Buy rating and a $9 price target.

Citigroup noted, "At ZLC we see stock upside as comp store sales momentum continues on improved product execution and portfolio, a fixed capital structure, and better store initiatives. EPS growth is poised to accelerate on a substantial operating margin expansion as ZLC gains share. We apply a price target of $9 on 0.35x sales and 5.4x EBITDA multiple."

Zales closed at $6.63 on Thusday.

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