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In a report published Monday, Benchmark Company reiterated its Hold rating on PriceSmart
PSMT, but lowered its price target from $86.00 to $80.00.
Benchmark Company noted, “The month's comp was in line with our model of up 8.0% and just slightly below consensus of up 9.0%. For 1Q13, comps increased 8.3%, slightly below our 8.6% estimate. We expect the new lower prices and macro economic conditions are weighing on the comps and operating margins. We also believe that opening two stores this year, versus zero last year, should add to SG&A. We believe the declining comps, a likely lower gross margin from price cuts, and increasing SG&A should pressure operating margin from expanding in FY2013. With the comp for the quarter in line with our estimate, we maintained our below consensus Q1 EPS estimate of $0.60, and 2013 EPS estimate of $2.68. We lowered our price target to $80, from $86, on a more conservative 30x FY 2013 EPS, and maintain our Hold rating.”
PriceSmart closed on Friday at $75.27.
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