Will Ann Stock be Affected by Analyst Downgrade?

NEW YORK (TheStreet) -- Analysts at Piper Jaffray today downgraded Ann (ANN) to "neutral" from "overweight," while they increased the price target to $47 from $46.

The downgrade follows Ascena Retail Group (ASNA)'s announcement to acquire Ann, according to Piper Jaffray analysts. Ascena is an American retailer of women's clothing.

The deal, which is expected to close later this year, offers Ann shareholders $37.34 in cash and 68 cents of a share of Ascena, the equivalent of $47 per share.

Therefore, analysts said they updated their price target to reflect the announced deal price.

Some risks to the changed price target are reliance on key top management, markdown risk tied to private label product, and geopolitical uncertainty, they noted.

Ann is a national specialty retailer of women's apparel, shoes and accessories, sold under the Ann Taylor and LOFT brands.

In Tuesday's early morning trading, shares of Ann are increasing 0.87% to $46.81.

TheStreet Ratings team rates ANN INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANN INC (ANN) 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, good cash flow from operations 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."

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