Fred's Has 3Q EPS Beat

FRED's (NASDAQ: FRED) beat 3Q EPS guidance according to a Morgan Keegan report published yesterday.

FRED's 3Q EPS of $0.20 was ahead of Morgan Keegan/the Street's estimate of $0.18. Morgan Keegan notes higher gross margin and a lower tax rate than expected as the reasons for the beat.

Morgan Keegan writes, "We reiterate our Outperform rating and hold confidence in the risk/reward outlookas we continue to see Core 5 merchandise driving higher comps and improved operating margins. Shares trade at 5.5x our NTM EBITDA estimate (3-yr range: 4-11x)."

FRED closed Tuesday at $12.68.