), Intimate Brands (IBI
), and Limited Inc. (LTD
) to buy from market perform.
Analyst Dana Cohen says Ann Taylor's December same-store sales seem to be running better than expected. While promotional activity is certainly helping, Cohen says, the company is seeing improving customer response to new products, particularly a new transitional assortment. Cohen thinks December same-store sales can beat the company's minus 7%-8% plan. She adds that operating margins are extremely depressed, but there is high leveragability to Ann Taylor's model. She raised her $0.25 fourth-quarter EPS estimate to $0.27.
Cohen upgraded Intimate Brands' rating based on improving momentum at its Bath & Body Works unit, and continuing strength at Victoria's Secret. With Intimate accounting for 97% of Limited's valuation, and the apparel business likely tracking near to plan, she also raised Limited's rating.