UPDATE: Piper Jaffray Initiates Tile Shop at Overweight on Competitive Advantages

Piper Jaffray initiated coverage on Tile Shop

with an Overweight rating and a $19 price target. Piper Jaffray said, "The Tile Shop (TTS) is a compelling long-term retail growth story with an opportunity to increase its current base of 63 stores by more than 5x, and take share within the growing and fragmented hard-surface flooring industry. Importantly, the company has distinct competitive advantages in its direct sourcing capability, broad product offering, and impressive store model that differentiate it from both independent and big box home improvement retailers. While the operating margin is under pressure near term due to infrastructure investments, long term we see an opportunity for annual EPS growth of 25% driven by unit growth of +20%, comp growth of +5-6%, and modest operating leverage." Tile Shop closed at $14.60 on Monday.