Wedbush Maintains Outperform Rating On Pier 1, Reduces PT to $20

Wedbush analyst Joan Storms today maintained an Outperform rating on Pier 1 Imports, Inc. (PIR) and reduced his price target from $21 To $20. 

Storms comments: “We see a number of ongoing initiatives which continue to drive productivity, as well as newer ones that should provide an incremental boost. Sales drivers include a continuation of on-trend merchandise, e-commerce initiatives, improved allocation, store enhancements, layered marketing initiatives, rewards card provider ADS, new impulse items and shopping baskets, and new technology initiatives, such as the new POS and upcoming tablets to the stores. Although results have been disappointing for the past several quarters primarily due to weather and promotions, customers are responding very positively to the new merchandise (including a large expansion of the assortment online), compares get easier for both comps and margins, and we see significant opportunities for the company’s omnichannel strategy, which is already building strong momentum as evidenced by Q1 results.

Our new $20 price target assumes that PIR should trade at approximately 15x our revised FY15 EPS estimate of $1.34, which is in line with our projected mid-teens longer-term earnings growth rate”.

According to TipRanks, which measures analysts and bloggers success rate based on how their calls perform, analyst Kenneth Herbert currently has a one-year average return of 5.8% and a 64% success rate. He is ranked #929 out of 3118 analysts.

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