Finish Line Worth $34/Share Now, Monness Crespi Hardt Says

In separate reports published Monday, Monness Crespi Hardt analysts maintained a Buy rating on Finish Line Inc FINL, while raising the price target from $29 to $34, after the company reported a solid 1Q beat.

Finish Line reported its 1QFY15 EPS at $0.30, beating the Street estimate of $0.24. The company recorded total sales growth of 9.1 percent, which included 4.2 percent growth at The Finish Line, 36 percent growth at b>Macy's, Inc. M and 39 percent growth at Running Specialty Group (RSG).

While SSS grew 5.5 percent, gross margins shrunk 40 bps due to lower merchandise margins and deleverage on occupancy expense. The company’s operating margins expanded 10 bps to 5.0 percent.

In the report Monness Crespi Hardt noted the reasons for the Buy rating as:

1. Inexpensive valuation
2. Conservative guidance
3. High probability of the management undoing last year’s “merchandising missteps” in view of the strong industry trends

The analysts expect Finish Line to generate “meaningful” EPS growth over time, while noting that the company is currently “the cheapest stock in our universe.”