UPDATE: Oppenheimer Initiates Coverage on Ascena Retail Group with Outperform Rating, $25 PT on Compelling Valuation

In a report published Thursday, Oppenheimer analyst Anna Andreeva initiated coverage on Ascena Retail Group ASNA with an Outperform rating and $25.00 price target. In the report, Oppenheimer noted, “With its niche concepts, a holding-company M&A strategy, and a big opportunity for corporate overhead reduction and integration of Lane Bryant/Catherine's kicking in more meaningfully in 2014-2015, we think ASNA could be one of the more interesting stories in retail. Meanwhile, valuation is extremely compelling, with the stock trading at 13x our C2014 EPS estimate, a 30% discount to the group. Rightly so, sentiment on ASNA has been more negative with the shares lagging the group (down 4% YTD) and less than one-third of the sell side is recommending the stock, as upside from Charming Shoppes synergies has been offset by the legacy ASNA brands decelerating for the last few quarters. Still, for longer term investors, we view risk/return as attractive, and any good news out of the core divisions should result in multiple expansion.” Ascena Retail Group closed on Wednesday at $17.62.