UPDATE: Goldman Sachs Initiates Coverage on Ann Taylor with Sell Rating, $29 PT as Inventory is Elevated into Slowing 2H Demand Picture

In a report published Monday, Goldman Sachs analyst Tiffany Hagge initiated coverage on

with a Sell rating and $29.00 price target. In the report, Goldman Sachs noted, “We are Sell rated on ANN, as our tactical framework suggests demand is not materializing to support increased inventory investment heading into 2H13. We see 18% downside to our 6-month price target of $29 vs. 6% upside for the rest of our coverage. We believe the need to clear excess inventory at a discount will result in significant gross margin pressure, and increased promotional activity QTD at both Ann Taylor and Loft brands supports this is beginning to play out.” Ann Taylor closed on Friday at $34.95.