UPDATE: Stifel Upgrades The Men's Wearhouse As JOSB Acquisition Is Complete
In a report published Wednesday, Stifel analyst Richard Jaffe upgraded the rating on The Men's Wearhouse (NYSE: MW) from Hold to Buy, and named a $67.00 price target.
In the report, Stifel noted, “After reviewing our MW/JOSB assumptions following the closing of the JOSB acquisition and adjusting our pro-forma model, we are upgrading the shares to a Buy. We view the acquisition as a positive for MW and believe that the combined entity has significant strategic benefits and opportunities as MW incorporates JOSB into their shared services model.
"These include purchasing efficiencies, optimization of marketing practices including electronic media purchases, the elimination of duplicative operating functions among many others. Qualitatively, the benefit of managing one's former rival is significant. In addition, the fundamentals of both businesses have improved and will likely continue to strengthen as the year progresses. We are intrigued by the tremendous earnings leverage of the MW/JOSB businesses, the market share the combined entity will possess and by the potential synergies to be achieved.
"We are conservatively estimating $4.75 in EPS by 2016. When applying a 14x multiple, given the growth prospect of the combined entity, we estimate a $67 target price.”
The Men's Wearhouse closed on Tuesday at $56.35.
Latest Ratings for MW
|Oct 2014||Jefferies||Initiates Coverage on||Buy|
|Jul 2014||Stifel Nicolaus||Upgrades||Hold||Buy|
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