Mizuho Cuts Express' Price Target By $7 In 'Tough' Retail Environment

Mizuho Securities' Betty Chen reiterated Express, Inc. EXPR's Buy rating and increased the company's price objective from $24.00 to $17.00. The price target change came after Express reported earnings, missing estimates Wednesday.

The analyst believed 2QFY16 disappointing guidance "prudently" reflected volatility in the retail industry. Chen, however, thinks Express will continue "to elevate its brand positioning, proactively reduce expenses, and improve store productivity while maintaining its trend-right assortment."

Traffic Industry Headwinds

Due to "trends witnessed in 2H of 1Q," Chen believes traffic headwinds will continue to pressure Express in 2QFY16 and throughout 2016. That said, the analyst was "encouraged by a strong response to the product assortment as evidenced by solid conversion."

Despite a significant price target decrease, the analyst remained optimistic to improve store productivity and cutting costs through "pruning underperforming locations" and "new management/enterprise planning systems."

At time of writing, Express was trading at $14.26, down 2.86 percent on the day.