Ahead of the Bell: Analyst upgrades New York & Co.
May 6th, 2008 | by admin |NEW YORK—An analyst upgraded New York & Co. Monday, saying the women’s apparel retailer is on the road to recovery and will likely begin to post an increase in earnings.
Brean, Murray, Carret & Co. analyst Eric Beder raised his rating to “Buy” from “Hold” and set a $7.50 share price target on the retailer.
The target implies he expects the stock to rise 20 percent over Friday’s $6.25 closing price.
The company’s management has set itself up to grow earnings over the next few periods with tighter inventories and less discounting, he said.
“If sales momentum can finally kick in, we believe the investment could become even more compelling,” Beder said in a note to clients.
An upcoming company business update will likely show New York & Co.’s moves to cut inventory and raise margins, and also an increase in customer traffic, he said.
For fiscal 2008, Beder raised his earnings estimate to 47 cents per share from 44 cents per share. On average, analysts polled by Thomson Financial expect earnings of 47 cents per share.
The New York-based retailer has nearly 600 stores in 44 states.
Shares rose 25 cents, or 4 percent, to $6.50 in premarket trading. The stock has traded between $3.65 and $13.91 over the past year.
