Liz Claiborne Shares Soar On Analyst's Forecast

NEW YORK (AP) — Liz Claiborne Inc. shares soared Monday after a Goldman Sachs retail analyst upgraded them to a "buy" rating and raised his target price, saying a significant recovery is at hand, fueled by leaner inventories, debt reduction and the overhaul of its namesake brand.

Goldman Sachs retail analyst Benjamin H. Rowbotham wrote Monday that, "after a tough 2008, we believe fundamental change is afoot." He predicted the company's first-quarter results, to be released later this month, will serve as a "a positive inflection point" — the trough in deterioration of the company's earnings before interest, taxes, depreciation and amortization.

"We see this as the last 'incrementally bad' fundamental quarter," Rowbotham said. He expects a loss of 25 cents per share in the first quarter, matching Wall Street estimates.

Liz Claiborne shares rose $1.46, or 30.4 percent, to $6.26 during trading Monday afternoon. Over the past 52 weeks, they have traded at $1.46 to $20.14.

Rowbotham noted that recent data suggest that inventory declines at department store and apparel suppliers have finally begun to translate into profit. He noted that J.C. Penney, Jones Apparel Group Inc. and children's clothing maker Carter's Inc. have either raised their profit outlook or posted results that beat Wall Street estimates.