Chico's (CHS) Stock Price Target Lowered at RBC Capital Markets
NEW YORK (TheStreet) -- RBC Capital Markets lowered its price target on Chico's FAS (CHS) - Get Report stock to $14 from $18 on Wednesday. The firm maintained its "outperform" rating on the stock.
The retailer reported lower-than-expected 2015 third quarter earnings results on Tuesday, but total shareholder return will likely increase as restructuring and shareholder friendly initiatives take hold, RBC said.
"After two years of earnings misses, we view 2015 as a reset year at Chico's, owing to company-specific actions to drive ticket gains and shore up profitability," the firm said.
Chico's stock could also be boosted by new CEO Shelley Broader, who joined the company in October.
RBC analysts lowered their 2015 earnings estimate for Chico's to 67 cents per share from 80 cents per share.
Chico's stock is down by 0.04% to $12.14 in early-morning trading on Wednesday.
Separately, TheStreet Ratings team rates CHICOS FAS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate CHICOS FAS INC (CHS) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- CHS's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- CHICOS FAS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHICOS FAS INC increased its bottom line by earning $0.42 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.42).
- Net operating cash flow has decreased to $70.34 million or 17.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The share price of CHICOS FAS INC has not done very well: it is down 18.56% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: CHS
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.