Market Overview

Signet Jewelers' Blemishes Lead To RBC Downgrade

Share:
Signet Jewelers' Blemishes Lead To RBC Downgrade
Related SIG
Benzinga's Top Upgrades, Downgrades For January 18, 2019
48 Biggest Movers From Yesterday
Citi expects more damage at Signet (Seeking Alpha)

Investors with confidence in Signet Jewelers Ltd. (NYSE: SIG)'s long-term story showed patience and risk tolerance — but now one Wall Street analyst is no longer comfortable with a bullish stance.

The Analyst

RBC Capital Markets' Brian Tunick downgraded Signet Jewelers' stock rating from Outperform to Sector Perform with a price target lowered from $60 to $55.

The Thesis

Signet's stock has seen notable selling pressure over the past two years, as many investors were left waiting for a comp recovery and the sale of its credit portfolio acted as a "more meaningful" catalyst, Tunick said in the downgrade note. (See the analyst's track record here.) 

These tailwinds have yet to play out, and the company's 2017 holiday sales performance confirms that "ongoing challenges" remain in place despite a solid macro and retail environment, the analyst said. Specifically, a negative 5.3-percent holiday comp is "disappointing," even if it's within management's guidance range, Tunick said. 

Looking forward, the analyst said he has "less confidence" that Signet can take market share in the jewelry space. The sale of the subprime book in the first half of 2018 will merely "add incremental noise," Tunick said. 

The analyst's new $55 price target is based on a 10x multiple on his fiscal 2019 earnings per share estimate.

Price Action

Shares of Signet Jewelers were trading higher by 3.13 percent at $56.93 Friday afternoon. 

Related Links:

Report: The Retailers Most Dependent On Holiday Sales

Analyst: Signet Jewelers Could Benefit From Low Expectations

Latest Ratings for SIG

DateFirmActionFromTo
Jan 2019CitigroupDowngradesNeutralSell
Jan 2019Wells FargoMaintainsMarket PerformMarket Perform
Dec 2018NomuraMaintainsNeutralNeutral

View More Analyst Ratings for SIG
View the Latest Analyst Ratings

Posted-In: Brian Tunick holiday sales jewelry RBC Capital MarketsAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (SIG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
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.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Oppenheimer: Aclara Acquisition, Taxes Brighten Hubbell Inc.'s Outlook

Concert Pharma Drops On Patent Litigation Setback; Mizuho Downgrades