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Express: Analysts Kept Their ‘Hold’ Ratings after Fiscal 4Q17

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Rating synopsis

Following Express’s (EXPR) fiscal 4Q17 results on March 14, 2018, all six analysts covering the stock maintained their “hold” ratings. There are currently no “buy” or “sell” recommendations for the stock.

There has also been no price revision activity for Express stock since the earnings announcement.

Currently, analysts’ 12-month average target price for Express stock is $9.90, which reflects a 37.5% upside to the stock as of March 16, 2018.

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Why analysts remain on the sidelines

Express and most of the traditional retailers have been impacted by challenging retail conditions. As e-commerce gains traction, malls are seeing reduced footfall, which is affecting store sales. At its fiscal 4Q17 earnings conference call, Express management mentioned that store sales continued to be troubled in the key weeks leading up to December 2017.

With consumer preferences shifting to online shopping, Express has been working on developing its omnichannel sales platform. It’s also improving its ship-from-store option and its purchase-online-pick-up-in-store facility.

Express has been reducing its number of retail store locations considerably and is focusing on its outlet business. It’s also overhauling the assortment to serve its customers.

Peer ratings

Of the 22 analysts covering Foot Locker (FL), 32% have given it a “hold” rating. For Ascena Retail (ASNA), 86% of the seven analysts covering the stock have given it a “hold” rating, and 80% of the 25 analysts covering Gap (GPS) have recommended a “hold.”

Currently, analysts’ target price for Foot Locker is $51.60, reflecting a ~17% upside to the stock’s price as of March 16, 2018. For Ascena Retail, the mean target price is $3.20, which indicates a 53.8% upside to its stock price as of March 16, 2018. For Gap, the target price is $34.38, implying an 8.32% upside to its stock price as of March 16, 2018.

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