Morgan Stanley On Genesco: Moat Not Wide Enough, Initiates Coverage At Equal-Weight

Jay Sole of Morgan Stanley initiated coverage of

on Thursday with an Equal-weight rating and $82 price target. “We believe the evolving retail landscape poses challenges to Genesco and limits the stock's out-performance potential,” Sole wrote. The analyst adds that while the company has successfully developed a product assortment that is difficult for competitors to replicate, internet pure-play companies and improving brick and mortar competitors may “stymie sales growth.” Genesco has some “leverage” to several key positive industry themes but lags some of its peers in the “hot” athletic footwear segment. In addition, the analyst points out that the company's foreign growth potential also lags its peers. Sole sees a “relatively balanced” risk to reward profile for shares despite the company's “differentiated fashion athletic footwear assortment in a unique store environment.”