) to strong buy from buy.
Analyst Alan Rifkin tells Standard & Poor's MarketScope he believes Pier 1's strong fundamentals and compelling EPS growth prospects are not adequately reflected in the current multiple at which the stock trades. Moreover, he raised his long-term EPS growth rate to 17% from 14%. Rifkin says business trends remain strong, with comparable-store sales in May already up 6%-7%; he expects easy comparisons over the next five months. The analyst is keeping his 0.21 first-quarter EPS estimate. He has high confidence in his $1.26 fiscal 2003 (ending February) and $1.46 fiscal 2004 EPS estimates. He notes that the shares are trading at a 40% discount to the group and a 20% discount to the next cheapest name.