Piper Keeps its Overweight Rating for hhgregg (HGG)

With hhgregg, Inc. HGG releasing its earnings tomorrow, Piper Jaffray reiterated its Overweight rating for the company, holding to its $32 price target. The analysts believe that "government stimulus for appliances during the quarter and [approximately] 30% estimated square footage growth name in our coverage universe." With estimates above the street's consensus, they predict fourth quarter EPS of $0.29 and 2010 EPS of $1.08. Driving this estimate is strong appliance sales during the quarter, in large part due to government rebate programs. Looking ahead, Piper maintained its $1.40 EPS for 2011. They noted that the key to achieving this figure is "new store productivity." While they model 2011 first quarter EPS to be at $0.01 loss, they "expect strong earnings growth throughout the year as store sales volumes ramp up during the holiday season. As of the market close today, HGG is trading at 26.62. Given Piper's $32 price target, the analysts believe the stock still has room to grow.