BlueFin Research Becomes Positive On Express, Sees In-Line Q2 Results

BlueFin expects Express, Inc. (NYSE: EXPR) to report its second-quarter revenue and EPS in line with consensus estimates of $520 million and $0.17, respectively.

The specialty apparel and accessories retailer is expected to report its second-quarter financials on August 24. BlueFin's channel checks suggest "that the assortment newness is working as evident by stronger traffic and sales trends" since the end of July that has continued into the start of the third quarter.

"We think management will be more optimistic about the 2H:16 and that FYQ3 revenue and EPS guidance will at least be in-line to slightly better than consensus estimates of $530 million and $0.32, respectively," analyst Rebecca Duval wrote in a note.

Duval reiterated her Market Outperform rating and $20 price target saying that the stock is set to move higher given relatively low expectations for the second half and success of new products.

Related Link: Urban Outfitters Beats Expectations, Follows The Greater Retail Trend

At a current price of $15.47, the analyst said the stock trades at 11.0x FY1 P/E, which positions Express "far from being an expensive stock" among peers. "Consider that Abercrombie & Fitch Co. (NYSE: ANF), L Brands Inc (NYSE: LB) and Urban Outfitters, Inc. (NASDAQ: URBN) trade at 27.8x, 19.8x and 15.86x FY1 P/E, respectively," the analyst said.

"If we're correct about the effectiveness of their merchandising campaigns, more efficient sourcing strategies and benefits from its system upgrades, then this is a stock that could provide upside surprises as opposed to one that consistently disappoints every few quarters," Duval added.

Shares of Express closed Tuesday's regular trading at $15.37.

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