Market Overview

J.P. Morgan Reiterates Overweight Rating on Saks on Redemption Notice Announcement

Related SKS
Saks Unveils Plans for Seven New Off 5th Stores for 2014
Saks Offers Update on 'Go-Shop' Period

In a report published Friday, J.P. Morgan analyst Matthew R. Boss reiterated an Overweight rating on Saks (NYSE: SKS).

In the report, Boss noted, “This morning, SKS announced that it is giving redemption notice to the holders of its $230M 2.0% convertible senior notes due March 2024 at 100.2% of the principal amount. More/less EPS neutral in FY13 (lower share count offset by higher interest exp), we see this as a positive from a capital allocation/share count dynamic longer-term (FY13 share count reduced ~10%) particularly with management accelerating its use of capital toward buybacks (largest use of capital in 5 years in FY12). While we see near-term constraints in 1H13 (front-end loaded SG&A / larger picture top-line concerns), we think today's announcement is a vote of confidence for 2H13 and FY14's underlying prospects (Omni-Channel, luxury demand, wealth effect).”

Saks closed on Thursday at $11.67.

Posted-In: J.P. MorganAnalyst Color Reiteration Analyst Ratings


Most Popular

Related Articles (SKS)

Around the Web, We're Loving...

Partner Network

Get Benzinga's News Delivered Free