3/10/2010-Citigroup downgraded J Crew Group (NYSE:JCG) to Hold Tuesday but raised its price target to $50.00 from $49.00, saying it prefers to buy the stock on a pullback.
Analyst Kimberly Greenberger, said, "We find 4Q09's +17% comp, +13% direct growth & +1,630bps gross margin impressive; however, JCG shares have moved ~+44% since 8/27/09. Although we continue to see ~+6% upside to our new $50 price target (raised from $49) we prefer a pullback before contemplating a commitment of new capital. We expect continued solid execution & believe 1Q10 EPS guidance is conservative, but the stock at 20.4x 2010E and 17.4x 2011E likely discounts much of the good news. Historically high operating margins (we expect 16% in '11), modest N-T square ft. growth (~+3% in 2010), & flattish 2H10E EPS growth could hold the shares back."
The bank expects the company to report 2011 EPS of $2.30, versus consensus estimates of $2.14.
Keywords: crew Citigroup Downgrade Stock hold Target smartrend
Ticker(s): JCG
