Will This Upgrade Help Chico's FAS (CHS) Stock Today?

Story updated at 9:50 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Chico's FAS (CHS) was upgraded to "outperform" from "market perform" by FBR Capital Markets Tuesday.

Shares of Chico's gained 2.6% to $16.09 in morning trading.

The firm set a price target of $19 for the apparel company. Chico's has multiple potential catalysts according to FBR analysts.

Must read: Warren Buffett's 10 Favorite Growth Stocks

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

-------------

Separately, TheStreet Ratings team rates CHICOS FAS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHICOS FAS INC (CHS) 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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • CHS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that CHS's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for CHICOS FAS INC is rather high; currently it is at 55.69%. Regardless of CHS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.05% trails the industry average.
  • 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CHICOS FAS INC reported lower earnings of $0.40 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.40).
  • CHS, with its decline in revenue, slightly underperformed the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 6.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of CHICOS FAS INC has not done very well: it is down 8.17% 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. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
  • You can view the full analysis from the report here: CHS 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.

If you liked this article you might like

Trader's Daily Notebook: The Grind Goes On

Week Ahead: With Trump Out of Washington, the Focus Returns to Fed Forecasts

L Brands, Other Mall Retailer Stocks Rising on March Sales Figures

Activist Investor Marcato Rebukes Buffalo Wild Wings Director Nominations

Analysts' Actions -- Carnival, Kellogg, Wynn Resorts, Progressive and More