UPDATE: Bank of America Merrill Lynch Downgrades Finish Line to Underperform, Lowers PT
In a report published Friday, Bank of America Merrill Lynch downgraded its rating on Finish Line (NASDAQ: FINL) from Buy to Underperform, and lowered its price target from $28.00 to $16.00.
BofA Merrill Lynch noted, “We are downgrading Finish Line to Underperform, as Finish Line continues to lag growth of key competitors despite robust growth in athletic footwear and significant investments over the last year. FINL reported F3Q13 EPS of $0.00, well below cons. of $0.10 and our forecast of $0.12, driven by disappointing comp sales of +3.6%% (a significant deceleration from 12.3% in F2Q). Op. margins declined 330bps to -0.6% (vs. fcst. 2.9%) due to GM compression of 200bps to 30.3% (vs. fcst 32.7%) and SGA deleverage to 30.8% of sales (up 120bps). We are lowering our PO to $16 (from $28), 10x our new F14E EPS of $1.60 (from $1.95). Our F13E EPS goes to $1.50 (from $1.70), in-line with FINL's lower guidance of $1.47-$1.53.”
Finish Line closed on Thursday at $18.18.
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