DA Davidson Upgrades Quiksilver to Buy

DA Davidson has published a research report on Quiksilver

and has upgraded the company from Neutral to Buy. In the report, DA Davidson writes, "Quiksilver reported 4Q11 revenue, pro forma EBITDA and EPS of $545.2 million, $57.1 million and $0.06, respectively, compared to our estimates of $541.4 million, $59.6 million and $0.08. Consensus revenue and EPS estimates were $528.5 million and $0.07. Lower than modeled gross margin and higher other expenses were the primary drivers of the $0.02 shortfall versus our model. Inventories were up 30% (26% in constant currency) year-over-year. We are encouraged by two consecutive quarters of constant currency growth and guidance for continued momentum in FY12. With U.S. owned retail improvements, Roxy stabilizing, DC growth, Quiksilver product line extensions (Winter and Quiksilver Girls,) and emerging market growth all adding to Quiksilver's growth rate, we believe a sustainable growth trajectory is well established at this point." DA Davidson has also raised the price target from $3.75 to $5 on Quiksilver, which is currently trading flat at its $3.46 closing price on Friday.