Express Trends Still Strong, BlueFin Sees Stock At $26

BlueFin’s Rebecca Duval maintained a Market Outperform rating on Express, Inc. EXPR, while raising the price target to $26.

Trending Right

Duval expressed optimism regarding the current stock valuation, as well as the company’s “fashion forward product that is being very well received by its customer base and pipeline product that is supposedly just as trend right.”

The analyst believes given the strong performance in 2015, when Express Inc. outperformed most of its specialty retailer peers, there has been some investor concern regarding sales comps becoming tougher going forward, as well as the company’s “history of trip-ups.”

Robust Stock Performance

Duval expects these concerns to persist until management can prove them wrong. “Unfortunately for investors looking to invest at lower prices before an inflection point, when these concerns are put to rest the stock is likely to be trading much higher,” Duval pointed out.

Despite the strong performance of the stock over the past two months, the analyst believes the fundamental story would only improve as the year progresses.

Upside Surprise Likely

The new management’s merchandising and operational initiatives have been “winning” strategies, the analyst stated, which are likely to drive sustainable growth for the company, given that macro headwinds aren’t too strong.

“If we’re correct about the effectiveness of their merchandising campaigns, more efficient sourcing strategies and benefits from its system upgrades, then this is a stock that could provide upside surprises as opposed to one that consistently disappoints every few quarters,” the BlueFin report added.