Wachovia Upgrades Guess to Outperform

Analyst Joseph Teklits says style trends position the company well for the 2005 back-to-school and holiday periods

Wachovia upgraded Guess (GES ) shares to outperform from market perform.

Analyst Joseph Teklits says style trends position the company well for the 2005 back-to-school and holiday periods. Further, he sees "positive buzz" around the Marciano product, two new retailing concepts, and improved operating systems helping the company deliver 20% earnings growth over the next two to three years.

Teklits says with denim inventory steadily ramping, the Marciano product taking off, and comparisons becoming easier in August, same-store sales growth could accelerate in the second half of 2005. As such, he ups 4% third-quarter comp estimates to 6%, and his 6% forecast for the fourth quarter to 7%. He still sees flat April comps due to the shift in the Easter holiday. He increased his $18 stock price target to $20.

All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report.
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