) to outperform from neutral.
Analyst Richard Baum says his upgrade is based on evidence of a credible turnaround over the past two quarters; a view for improving average margins and returns; and a significantly enhanced management team. He says recent quarterly results demonstrate that strategies put into place a over year ago can drive significant transaction count increases and margin improvement.
Baum notes better merchandise at attractive price points has become a traffic driver rather than fire sale promotions. He says operating margin is still well below peak (14%); he sees still ample room for expansion. Baum sees 79 cents fiscal 2004 (Jan.) earnings per share, and $1.05 in fiscal 2005. He set a $32 target.