UPDATE: Stifel Reiterates On Aaron's On Lowered Core Business Estimates

In a report published Wednesday, Stifel analyst John Baugh reiterated a Buy rating on Aaron's (NYSE: AAN), but lowered the price target from $45.00 to $42.00.

In the report, Stifel noted, “First and foremost, the Aaron's core business is the sole issue. The recently acquired Progressive Financial business is tracking ahead of projections, as we had predicted. What we have wrong in our investment thesis so far is that while we had expected Aaron's core business to perform below management guidance for this year, it appears to be materially weaker than our assumptions, even our muted assumptions.

"We get the feeling that the issues with declining revenue in the core business is not going to be an easy fix. We have felt for some time now that Aaron's problems with its core business are deeper than management has acknowledged and that the ‘fixes' that were outlined in April were insufficient. Unfortunately, the situation is deteriorating even more rapidly than we had assumed. If there is any good news in this latest earnings revision, it should result in more aggressive cost reduction efforts and an even greater focus on acquisition synergies.”

Aaron's closed on Tuesday at $30.34.