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What’s Express’s Valuation?

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Jan. 19 2018, Updated 9:02 a.m. ET

Forward PE

As of January 12, 2018, Express (EXPR) was trading at a 12-month forward PE (price-to-earnings) multiple of 15.1x. Following its fiscal 3Q17 results, the valuation multiple for Express has decreased ~15%. As discussed previously in this series, the company reported weak holiday sales and a bleak outlook on January 9.

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Peer comparison

The company is trading at a higher valuation multiple in comparison with its peers. American Eagle Outfitters (AEO) is trading at a 12-month forward PE ratio of 14.1x, while Buckle (BKE) is trading at a 12-month forward PE ratio of 12.7x. Ascena Retail (ASNA) is trading at a 12-month forward PE of ~14.3x as of January 12, 2018, lower than that of Express.

Analyst estimates

For Express, analysts project fiscal 2017 revenue to be down 2.9% to $2.1 billion, while fiscal 2018 revenue is expected to decline 1.9%. For fiscal 2017, the company’s EPS is expected to be down 57.4% to $0.35 on an adjusted basis. Lower same-store sales, expected gross margin contraction, and higher expenses (mainly wages) are likely to have an adverse impact on the company’s fiscal 2017 bottom line. For fiscal 2018, EPS is expected to increase 46.7% to $0.51.

In comparison, for Ascena, analysts expect revenue to be down 5.3% to $6.3 billion, and EPS is projected to be down 36.1% to $0.14 in 2018. For fiscal 2019, analysts expect revenue to fall 2.4% to $6.2 billion, while earnings are projected to increase 9.7% to $0.15 per share.

For fiscal 2017, analysts estimate American Eagle Outfitters’ revenue to increase 4.3% to $3.8 billion, whereas EPS is expected to be down 7.2% to $1.16. The company’s fiscal 2018 revenue is projected to be up 1.4%, and EPS is likely to increase 13.1% to $1.31.

Buckle’s revenue is expected to be down 6.4% to $912.2 million, and EPS is expected to decline 16.1% to $1.70 in fiscal 2017. For fiscal 2018, revenue is projected to be down 3.1% to $883.7 million, while EPS is likely to decrease 3.5% to $1.64.

In the last article, we’ll look at what analysts have to say about Express stock.

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