Susquehanna Reiterates Positive Rating For Genesco (GCO)

Susquehanna analysts Christopher Svezia, Christina S. Cheng and Tom Haggerty reiterated their Positive rating for shares of Genesco Inc. (NYSE: GCO), with a price target of $31.

The analysts said that, "a methodical improvement in operating margins back to historical 8-9% levels is expected (currently ~5%). Outside of organic growth, the company plans to make strategic acquisitions with excess cash ( $250 million expected over the next 5 years) to drive incremental sales and earnings growth. Target companies would include smaller niche concepts that complement GCO’s current structure (i.e., Sports Fan-Attic). The company would look to leverage its infrastructure (distribution, systems, vendor relationships, etc.) to drive efficiencies."

The Susquehanna analysts noted that the stock was down 17%, "since January 12, when the company announced 4Q comps-to-date largely in line with expectations (+1%) and reiterated 4Q and FY10 guidance."

They believe that the stock is oversold and is trading at historically low discount to its peers.