Market Overview

Guess Investors Are Ignoring The Apparel Company's European, Asian Businesses

Share:
Guess Investors Are Ignoring The Apparel Company's European, Asian Businesses

Wunderlich's Eric Beder reiterated his Buy rating on Guess?, Inc. (NYSE: GES) shares, which were trading near a 52-week low last week, as he believes the market is ignoring the benefits of the company’s European and Asian businesses.

Q4 Expectations

Notably, Wunderlich is the only sell-side to have a Buy rating on Guess as investors worry after a slew of poor results from domestic specialty apparel retailers.

The comments came ahead of Guess' fourth quarter earnings on March 15. Beder expects EPS of $0.40, which is below management's $0.42 to $0.52 guide and Street consensus of $0.45. The analyst believes the consensus is achievable, but upside is limited.

“While we fully admit that the domestic side of GUESS?'s business, like virtually every one else, remains highly challenged, we believe investors are ignoring multiple signs of a turn in the key (and higher-margin) European and Asian businesses, which have the ability to drive overall upside for the company,” Beder wrote in a note.

Margin Boost From Potential Reduction In Domestic Footprint

Beder expects continued solid positive comps from owned European stores, as the fashion shifts and slow economic recovery drive upside, while North America was highly difficult.

In addition, Beder believes Guess is set to reduce its domestic footprint that should lower working capital and enable the company to deliver higher margins and preserve cash for dividends.

Shares of Guess closed Friday at $12.07. Beder has a price target of $20, implying a potential upside of about 66 percent.

Related:

Tech Earnings Expectations: Adobe Vs. Oracle

Stocks To Watch For March 13, 2017

Image Credit: By Eva Rinaldi from Sydney Australia (Gigi Hadid) [CC BY-SA 2.0], via Wikimedia Commons

Latest Ratings for GES

DateFirmActionFromTo
Aug 2019ReiteratesBuy
Feb 2019UpgradesHoldBuy
Feb 2018UpgradesNeutralBuy

View More Analyst Ratings for GES
View the Latest Analyst Ratings

Posted-In: Eric Beder WunderlichAnalyst Color Previews Reiteration Analyst Ratings Trading Ideas Best of Benzinga

 

Related Articles (GES)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
POWLSidoti & Co.Maintains47.0
XDeutsche BankInitiates Coverage On121.0
WTEBMO CapitalMaintains18.0
DOLBMO CapitalMaintains50.0
NABMO CapitalMaintains69.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Here's Why Ferrari Shares Are A Buy

Preet Bharara Refused To Resign As Federal Prosecutor, So President Trump Fired Him