Markets & Finance

Wachovia Ups Charlotte Russe Rating

Wachovia raised its investment recommendation on Charlotte Russe Holding (CHIC) to outperform from market perform.

Analyst Joseph Teklits said the company could be positioned for an operating margin rebound after struggling for the past three years. He said fashion trends are favorable, a turnaround at Rampage is well underway, and the company has filled key management positions with the hiring of a new chief merchant for Charlotte Russe concept. The analyst also believes, given its attractive price points, that Charlotte Russe Holding could benefit if consumers decide to tighten up on spending and trade down to lower priced apparel. He upped his 74 cents fiscalyear 2006 (ending September) earnings per share estimate to 95 cents, after recently raising his 18 cents fourth quarter fiscal year 2005 estimate to 24 cents, well above the company's 16 cents to 20 cents estimate.

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