BB & T Capital Markets' Buy Rating Initiates Maidenform Brands (MFB) Coverage
March 12, 2010 10:15 AM
BB & T Capital Markets analyst Scott D. Krasik initiated coverage of Maidenform Brands, Inc. (NYSE: MFB) with a Buy rating and a price target of $27.
Krasik noted that two thirds of Maidenform Brands' sales come from bras, which are mostly sold on a replenishment basis. Although fashion is a factor, it's not the main one driving bra sales.
He was also impressed by Maidenform Brands' growth in sales and market share in the fast growing shapewear category.
The BB & T Capital Markets analyst wrote that Maidenform Brands' "attractive valuation offers upside potential from current levels. Maidenform trades at 13.2x and 11.3x our above-consensus FY’10 and FY’11 EPS estimates of $1.60 and $1.88, which we believe represents an attractive valuation. Our $27 price target assumes the shares trade at 17x our FY’10 EPS estimate, above its historical average but appropriate, in our view, based on its robust growth prospects in defensive categories and solid cash flow generation."
