Morgan Stanley Says Saks Better-Than-Expected Q4 Results Are Encouraging (SKS)
2/25/2010- Morgan Stanley said that Saks' (NYSE: SKS) better-than-expected Q4 results are encouraging as the company's aggressive inventory management and focus on full price selling has helped restore gross margins to improved levels.
Analysts Michelle Clark and Christopher Cuomo said, "Yet, we remain EW SKS shares. Longer term, we are concerned about structural issues at SKS (primarily related to its non-ideal real estate portfolio). Valuing the stock assuming recovery to normalized margins of ~3% by 2012 and discounting back, we arrive at $8 fair value."
The bank maintains an "equal weight" rating on the stock and sees a fiscal 2010 loss of $0.14 per share.
Write to Chip Brian at cbrian@tradethetrend.com
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