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Wachovia upped its recommendation on Citi Trends (CTRN
) to outperform.
Analyst Joe Teklits said results have accelerated in August and September as convenient, neighborhood-based locations are even more appealing in the current macro environment. The analyst says same-store sales are better-than-expected, and well ahead of his 4% higher estimates and last year's increase of 1.7%. He believes new stores are running ahead of expectations, and management guidance may be conservative. He says he would not be surprised to see at least marginal upside potential to new estimates: fiscal year 2006 (ending January) earnings per share estimates are now 85 cents, up from 83 cents as management guides 80 cents to 83 cents; The analyst ups his fiscal year 2007 estimate to $1.00 from 96 cents.