Francesca's rises as analyst upgrades rating
NEW YORK (AP) — Francesca's stock rose on Tuesday as an analyst lifted the rating and price target for the women's clothing and accessories company, citing its appealing stock price.
THE SPARK: Randal Konik of Jefferies raised Francesca's rating to "Buy" from "Hold" and increased its price target to $38 from $35.
THE ANALYSIS: In a client note, Konik said that he cut Francesca's to "Hold" a quarter ago because of its high stock price and recent management changes. In September the retailer announced unexpectedly that its CEO and co-founder, John De Meritt, would retire at the end of this year. Neill Davis, who became president of the Houston company in August, will succeed him.
Francesca's stock has dropped 15 percent since the retirement announcement on Sept. 5. Konik said that company's stock price has become much more attractive since then and that he now feels more comfortable about new leadership.
The analyst said he likes Davis and is also pleased that Chief Operating Officer Theresa Backes will be taking on additional responsibility in the new year.
SHARE ACTION: Shares of Francesca's Holdings Corp. added 50 cents, or 2 percent, to $25.80 in midday trading. The stock has traded between $15.46 and $37.09 over the last year.