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UPDATE: Nomura Initiates Coverage on Ann on Fundamental Strength, Challenging Mall Environment

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In a report published Monday, Nomura analyst Simeon Siegel initiated coverage on Ann (NYSE: ANN) with a Neutral rating and $36.00 price target.

In the report, Nomura noted, “We expect the fundamental strength at ANN INC. (ANN) to continue but believe the shares may be range-bound in the near term in a challenging mall environment absent multiple expansion. As such, we are launching coverage on ANN with a Neutral rating but would look to become constructive on market pullbacks. We believe the drivers are in place to push margins back toward the 10%+ range in the long term through 1) increased penetration of the margin-accretive factory/outlet and 2) further growth in the DTC segment. We are projecting FY13/FY14 EPS of $2.26/$2.58, compared with the Street at $2.22/$2.56. Our $36 target price is based on 13-14x our FY14 estimate versus the softlines coverage universe average multiple of 14x and the stock's historical 10 year average of 15.5x.”

Ann closed on Friday at $35.29.

Posted-In: Nomura Simeon SiegelAnalyst Color Initiation Analyst Ratings

 

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