Retail Equity Analysis: Lululemon, J.C. Penney and Guess? at Buy Ratings

Intro

J. C. Penney Company, Inc. (NYSE:JCP): Argus lowers J.C. Penney estimates. J.C. Penney lowered fourth quarter outlook for adjusted earnings-per-share (NYSE:EPS) and sales date weaker than expected, leading Argus  to lowered estimates for fourth quarter EPS from 72 cents to 36 cents and fiscal year 2013 EPS estimates from $2.20 to $1.90. Argu expects the company to be overhauled by its new CEO and it maintains a Buy.

Lululemon Athletica Inc. (NASDAQ:LULU): RW Baird says buy Lululemon on any weakness. Although the company founder resigned as Chief Innovation Officer, he remains a key player for company strategy as Chairman. Baird expects continued rapid growth as the company opens new units and increase e-commerce. Baird rates Outperform rated with a $61 target.

The Children’s Place Retail Stores, Inc. (NASDAQ:PLCE): Susquehanna lowers Children’s Place target lowered from $70 to $66 from $70. Fourth quarter results pre-announcment by Children’s Place prompted the action.  Susquehanna believes the company’s long term results haven’t changed and sees positive things for this spring. This weakness is an opportunity to buy and PLCE maintains a Positive rating.

Guess? Inc. (NYSE:GES): Brean Murray says Guess for solid results. Brean Murray met with Guess management came away thinking the company is one of the best risk versus reward plays. The firm cited expansion in Norther and Eastern Europe, Asian revenue gains, cotton price gains and continued reduction in discounting. Guess is Buy rated with a $39  target.

Limited Brands, Inc. (NYSE:LTD): Cowen says buy on Limited weakness. After paying a special dividend in December, Limited Brands has succumbed to weakness. Cowen sees the declining price as a buy opportunity.  Cowen cites dividend yield, contraction of price-earnings ratio, and the Street’s conservative margin assumptions. Cowen rates Limited Outperform.

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