Macquarie Adjusts Recommendations On Several Retail Stocks

On Thursday, Macquarie Research analyst Laurent Vasilescu adjusted the investment rating and price targets on multiple retail stocks:

Tiffany & Co. (NYSE: TIF) upgraded to Outperform from Neutral; maintained $115 price target. Analysts believe the company will face tailwinds heading into the back half of 2014 leading to improved margins.

Lululemon Athletica inc. (NASDAQ: LULU) downgraded to Underperform from Neutral; lowered price target to $34 from $40. Analysts believe the company needs to ramp up R&D expenses to compete with UA and Nike.

Francesca’s Holdings Corp (NASDAQ: FRAN) downgraded to Underperform from Outperform; lowered price target to $11 from $16. Vasilescu feels the company needs to increase its advertising as it becomes a national brand.

Nordstrom, Inc. (NYSE: JWN) downgraded to Neutral from Outperform; lowered price target to $70 from $77. Analysts feel there may be incremental costs associated with Trunk Club for FY15.

Urban Outfitters, Inc. (NASDAQ: URBN) downgraded to Neutral from Outperform; lowered price target to $39 from $43. Analysts are concerned that the company’s plans to continue opening large concept stores may not complement the digital push.

Macy’s, Inc. (NYSE: M) maintained Outperform rating; lowered price target to $63 from $66. Vasilescu writes “the company has done a great job investing in the ‘MOM’ (My Macy’s, Omnichannel and Magic Selling) strategy.”

Ralph Lauren Corp (NYSE: RL) maintained Outperform rating and $180 price target. Analysts note SAP is in its peak investment year and we should begin to see payoffs in the back half of FY15 and beyond.

Ann Inc (NYSE: ANN) maintained Outperform rating; lowered price target to $44 from $53. Vasilescu noted, “the company retains a solid, tenured management team which delivers consistent gross margin performance. We also see Golden Gate’s investment as a potential positive to unlock additional shareholder value.”

Fossil Group Inc (NASDAQ: FOSl) maintained Neutral rating and $110 price target. Analysts believe that the evolution of smart watches will be a significant positive for FOSL.

Michaels Companies Inc (NASDAQ: MIK) maintained Neutral rating; raised price target to $18 from $17. Analysts favorably view the company’s multi-year strategy which includes improved store experiences, increased marketing and exclusive product selections as well as a cost savings initiative generated by employee suggestions.

Chicos FAS Inc. (NYSE: CHS) maintained Neutral rating and $15 price target. Vasilescu stated, “We favorably view management’s plan outlined during the analyst day on September 7 to return to a 10% operating margin over the next few years.”