Wunderlich Bullish On Perry Ellis

In a recent report by Wunderlich Securities, analysts reiterated their Buy rating on Perry Ellis International Inc

and set a $72.00 target for the stock. After a generally upbeat day of presentations at the 2015 ICR XChange Conference, analysts are optimistic about the prospects for Perry Ellis. Strong holiday numbers Management confirmed strong December sales numbers and solid inventories, setting Perry Ellis up for a profitable Spring. Analysts point to the unseasonably bad weather in late winter of last year leading to strong year-over-year comps this year. Licensing growth Perry Ellis generated over $31 million in licensing royalties in the past year from more than 150 licensing agreements. Management believes the company can add $10 million in high-margin revenue from additional licensing deals in the next four years. 10 percent EBITDA growth goal Perry Ellis management remains confident that they can expand the company's historical eight percent margin level by focusing on high-margin wholesale, licensing and online sales. The goal is to boost the company's earnings before interest, taxes, depreciation and amortization (EBITDA) by 10 percent. In addition to targeted sales growth, the company also made $6 million in expense cuts in the first nine months of 2014. These cuts are part of a streamlining initiative that analysts believe will continue to eliminate expenses in 2015. Forecast Analysts explain that Perry Ellis stock offers a compelling risk/reward balance for investors. “We believe momentum has the potential to remain strong into FY16 driven by greater focus, international, direct to consumer and licensing expansion and higher AURs.”