"CWTR did not offer specific Q4 guidance but suggested if November trends continued into December that a loss of 25-35c would be reported," wrote Whitfield, who has a neutral rating and 12-month price target of $4 on the stock.
While tax-loss selling might be a factor as well, the realization that the company is facing a slog of at least three months before new merchandise can make a splash may also be setting in, prompting investors to exit positions until there's more of a tangible possibility for a positive catalyst.
The fact that there's no guarantee the company's next collection won't get a similar negative response and questions about whether former fans of the stores will return are also likely to influence market sentiment from here.
While seven of the eight analysts covering the stock, including Whitfield, are at the equivalent of hold ratings, the market action on Thursday indicates plenty of investors don't share that opinion. Book value of $2.49 per share as of the end of the third quarter may provide some support, but with expansion plans scaled back for 2011, the near-term outlook is bleak and creative director Jerome Jessup has his work cut out for him.Roth Capital echoed this sentiment in its own Dec. 2 note, which brought its 12-month price target on the stock down to $3 from $4. "While we believe some of the issues are fixable sooner rather than later, i.e. marketing and more opening price points, several large challenges remain, most importantly, the merchandise," the firm said, adding that "there is very little near-term sales and earnings visibility" with improvements not expected until March. --Written by Michael Baron in New York.
>To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: firstname.lastname@example.org
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV