Oppenheimer Downgrades Conn's, Says Risk/Reward Not Favorable
In a report published Friday, Oppenheimer analysts downgraded their rating on CONN'S, Inc. (NASDAQ: CONN). The analysts express their concern regarding the company's risk/reward profile in the event of a potential sale of the Credit division, especially following the recent surge in the share price.
The stock has risen 43 percent so far in May and is currently trading at the highest levels since December 2013 and more than 180 percent higher than the lows seen in December 2014.
The analysts believe that the risk/reward profile is not compelling at present, since the shares could rise in the event that a sale of the Credit business is announced. On the other hand, if no deal occurs, the share price is likely to decline.
The analysts also expect the sale of the Credit business to drive the company's 2016 EPS meaningfully higher than the current estimate.
According to the Oppenheimer report, the underlying trends at CONN'S appear to be improving marginally, with a slight improvement in same store sales in April. "Sales have proven resilient against a backdrop of tighter lending standards, unfavorable weather, and the West Coast port delays," the analysts said.
Latest Ratings for CONN
|Sep 2016||Stifel Nicolaus||Upgrades||Hold||Buy|
|Mar 2016||Stephens & Co.||Upgrades||Equal-Weight||Overweight|
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