Cowen Downgrades Vera Bradley On Worries About Long-Term Viability

In a report published Thursday, analysts at Cowen and Company downgraded shares of Vera Bradley, Inc.

from Market Perform to Underperform. The firm also cut its price target from $21 to $13. These demotions follow the company's downbeat fourth quarter results and weak guidance on Wednesday. Related Link: Vera Bradley Posts Downbeat Q4 Results, Issues Weak Outlook The report states that, although the company's efforts are apparent, Cowen remains cautious on the risk/reward profile and the brand relevance. They model "further downside possible as fear challenging new cust acq, quantity of new product launches add risk/confusion, & margin/FCF profile on declining path." The company's "honest management team [is] making strong efforts" to counteract negative comps and "to improve brand equity, reach more customers & enhance product assortments." While the analysts are encouraged by this trend, they are worried about multiple issues. Namely: - Deteriorating (and downside risk to) comps - Margin pressure and free cash flow decline "draw attention to long-term viability and deter valuation."