Morgan Stanley Opens 15-Day Research Tactical Idea on AnnTaylor Stores

Morgan Stanley has opened a research tactical idea on AnnTaylor Stores

believing the share price will rise over the next 15 days. In the report, Morgan Stanley writes, "We think 1Q is off to a strong start at both the Ann Taylor and Loft divisions at ANN, Inc. We like the bright on-trend colors seen at both brands during our store checks and featured in their email promotions, driving store and online traffic and giving shoppers a reason to buy. We've also seen scaled down promotions vs. 4Q (ATS 1Q promos: BOGO 50% Off and 30% off entire purchase, less deep than 4Q's 40% / 50% off entire purchase, and Loft 1Q promos: select items 30-40% off; we estimate less of the store on promotion sequentially vs. 4Q), supporting merchandise margins (we est. -80bps 1Q GM due primarily to higher product costs vs. LY). Our $30 PT is based on 12x our $2.45 2013e EPS." Morgan Stanley maintains its Overweight rating on AnnTaylor Stores, which closed yesterday at $24.56.