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Jefferies analyst upgrades Vera Bradley rating

Jefferies analyst Randal Konik has upgraded his rating on Vera Bradley Inc.'s stock, saying the general market view of company is overly negative.

THE OPINION: Konik said that after recent meetings with Vera Bradley's management, he is confident the company's sales will grow.

The company's sales have improved recently on new styles and some increased traffic in stores. Konik says expects key sales measures to continue to increase. He expects its margins will improve in the fourth quarter on lower costs and fewer online promotions. The analyst also said that the company is in early stages of growth with room to more than quadruple its current base of roughly 75 stores.

Konik also says the company's bad news is in the past after an order error in the third quarter led to $15 million in excess inventory. He said the meetings led him with confidence that the product should sell at a healthy margin through the next year.

The analyst upgraded his rating to "Buy" from "Hold." He has a $35 price target on its shares.

THE STOCK: Shares fell 48 cents to close at $23.66. Its stock has clawed back from its all-time closing low of $19.68, which it hit on June 4.

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