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Will This Downgrade Hurt Express (EXPR) Today? (Update)

Stocks in this article: EXPR

Update (9:50 a.m.): Updated with Thursday market open information and Nomura target price decrease.

NEW YORK (TheStreet) -- UBS downgraded Express  (EXPR) to "neutral" from "buy" and set a $17 target price. The firm noted the company's underwhelming guidance with questionable execution and brand relevancy.

Nomura also decreased its target price on Express to $20, decreased its estimates and set a "buy" rating. The firm noted management cut guidance because of weak traffic trends.

The stock was falling 0.75% to $15.93 at 9:44 a.m. on Thursday.

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Separately, TheStreet Ratings team rates EXPRESS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXPRESS INC (EXPR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 10.6% when compared to the same quarter one year prior, going from $17.42 million to $19.27 million.
  • Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that EXPR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.57 is low and demonstrates weak liquidity.
  • Net operating cash flow has significantly decreased to $1.11 million or 92.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: EXPR Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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