Analyst Reports PacSun Likely To Stay In Business
josh hunter
- November 19 2008
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Citi Investment Research analyst Kimberly Greenberger recently upgraded Pacific Sunwear’s (PSUN) stock status to “hold” from “sell.” In her report she attributes the company’s “sufficient liquiduty” to its survival among deteriorating conditions. According to Greenburger, PacSun will end 2008 with $20 million dollars in cash, and will not have to dig into its $150 million dollar credit line. Despite the upgrade, Greenberger said that continued challenges of increasing sales and profitability face the teen retailer.
“For now, we believe Pacific Sunwear is likely to survive given its cash generation profile,” Greenberger wrote. “But we do not have catalysts for improving sales/profitability despite compelling merchandise appearance.”
The company, which hosted a conference call on November 18, expects a loss of $1.9 million to $5.2 million for the three months through January, versus a profit of $4.5 million expected by analysts.
PacSun’s stock enjoyed a 4% uptick after the upgrade announcement, but closed 2% down on November 19.
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