Analysts have been eager to weigh in on the Services sector with new ratings on Children’s Place (NASDAQ:PLCE) and DSW Inc (NYSE:DSW).
Children’s Place (PLCE)
B.Riley FBR analyst Susan Anderson reiterated a Buy rating on Children’s Place yesterday and set a price target of $167. The company’s shares opened today at $139.45.
Anderson said:
“PLCE (Buy, $167 PT) reported adjusted 2Q18 EPS of $0.70, well above B. Riley FBR/consensus estimates of $0.60/$0.59 and guidance of $0.51 to $0.61. Comps were +13.2% (versus B. +8.6%/+9.0%), vs. guidance of +HSD. GM leveraged +10 bps (versus B. bps/+136 bps) while SG&A leveraged +150 bps (versus B. Riley FBR/ consensus of +90/–50 bps). Management noted that QTD comps are running +LDD, with a majority of back-to-school sales behind them. Management raised the 2018 guidance from $7.95–$8.20 to $8.09–$8.29, vs. B. and raised 2018 SSS to +MSD from +3.5% to +4.5%. We are listening on the call at 8:00 a.m. ET for more details on the gross margin outlook, current trends, AUCs, product details, updates on strategic initiatives, and overall trends in children’s apparel retailing.”
According to TipRanks.com, Anderson is a 4-star analyst with an average return of 6.6% and a 56.1% success rate. Anderson covers the Services sector, focusing on stocks such as Lululemon Athletica Inc, Ascena Retail Group, and Abercrombie Fitch.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Children’s Place with a $162 average price target, a 16.2% upside from current levels. In a report released today, Monness also upgraded the stock to Buy with a $165 price target.
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DSW Inc (DSW)
B.Riley FBR analyst Jeff Van Sinderen maintained a Hold rating on DSW Inc today and set a price target of $23. The company’s shares opened today at $27.60, close to its 52-week high of $29.27.
Van Sinderen commented:
“DSW Inc. (DSW) reports 2Q results BMO on 8/28. We believe the Q will reflect an ongoing strong athletic/derivative segment, as well as contribution from kids added to new stores (94 additional locations that were planned at the beginning of 2Q). Our checks suggest that initial back-to-school (BTS) performance has been solid, which bodes well for 3Q. Men’s likely continued sequential improvement and returned to growth in 2Q, after comping flat in 1Q. Edited assortments in accessories likely minimized markdowns and remained positive. The company expanded the athleisure assortment and continued to plan boots and sandals flat. Our sense is that sandals benefited from overall warmer weather Y/Y throughout the Q. E-comm likely grew in the dd range.”
According to TipRanks.com, Sinderen is a 3-star analyst with an average return of 4.3% and a 52.7% success rate. Sinderen covers the Services sector, focusing on stocks such as Tuesday Morning, Tilly’s Inc, and Kirkland’s.
DSW Inc has an analyst consensus of Hold, with a price target consensus of $23.60, representing a -14.5% downside. In a report issued on August 17, Canaccord Genuity also maintained a Hold rating on the stock with a $22 price target.
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