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Why 1 UBS Analyst Is Boosting Her Ann Target By 17%

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Ann Inc (NYSE: ANN) extended its gains Monday after posting better-than-expected fourth-quarter results along with plans for future cost cutting.

The New York-based women's apparel retailer changed hands recently at $41.30, up $0.85. The shares are up about 13 percent since results were posted on Friday.

On Monday, UBS' Roxanne Meyer raised her target 17 percent to $41, maintaining a Neutral rating.

"The real news is the supply chain initiative," Meyer said.

Related Link: Morgan Stanley Sees Ann Taking All The Right Steps For Long-Term Success

Ann said Friday the initiative will result in $50 million in annual benefits to gross margin between now and 2017.

The company also announced separate savings of $35 million by 2017 from an ongoing "optimization" of its sales, general and administrative costs. The estimate includes $20 million in savings included in its 2015 outlook.

Meyer boosted her 2016 earnings estimate by 6 percent to $2.62 a share, citing the cost cuts and supply chain initiative. The analyst, however, shaved two cents from 2015 estimate to $2.04 a share.

The company, which launched a review of its supply chain management four months ago, said the initiative will focus on improved production speed and flexibility, along with reducing overall cost of goods sold.

Latest Ratings for ANN

May 2015MizuhoDowngradesBuyNeutral
May 2015JefferiesDowngradesBuyHold
May 2015PiperJaffrayDowngradesOverweightNeutral

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