NEW YORK (TheStreet) -- Analysts at UBS (UBS - Get Report) lowered their price target on Ann Inc. (ANN) to $45 from $48 on Monday based on valuation and margin pressure from the company's factor and outlet stores.
The firm also lowered its estimates on the women's apparel retailer for the 2014 second quarter to 81 cents per share from 88 cents per share.
Shares of Ann Inc. are up 0.28% to $38.98 on Monday.
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TheStreet Ratings team rates ANN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ANN INC (ANN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ANN's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ANN INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANN INC increased its bottom line by earning $2.19 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $2.19).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 97.5% when compared to the same quarter one year prior, rising from $2.37 million to $4.68 million.
- You can view the full analysis from the report here: ANN Ratings Report