The firm said it lowered its numbers on the apparel and accessories company after Express reported its 2014 third quarter earnings results, and slashed its full year 2014 guidance.
BMO reduced its fourth quarter 2014 EPS estimate to 40 cents from 58 cents. BMO also cut its full year 2015 earnings estimate to 87 cents per share, from $1.15 per share.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The firm said another reason it altered its numbers on Express is "in light of the Sycamore Partners' expressed interest in acquiring the company, Express did not repurchase shares or proceed with the refinancing of its 8 ¾ senior notes due 2018."
BMO has a $16 price target on Express stock, down from $20.
Shares of Express are up by 0.23% to $13.22 at the start of trading on Friday.
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 reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $35.99 million or 15.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.81%.
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 59.4% when compared to the same quarter one year ago, falling from $16.91 million to $6.87 million.
- The gross profit margin for EXPRESS INC is currently lower than what is desirable, coming in at 32.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.42% trails that of the industry average.
- You can view the full analysis from the report here: EXPR Ratings Report