Brian Sozzi Upgrades Guess? Inc. (GES)

Retail analyst Brian Sozzi of Wall Street Strategies is out with a research report on Guess? Inc. GES. He has a Buy rating and a $49 price target on shares. In a note to clients, Sozzi writes, "Primarily, our downgrade issued on November 30 to Hold was derived from a U.S. business that was underperforming peers on a comp and operating margin basis, which may be factors of cleaner looks emerging in the mall, sales softness in denim, and a lack of scale for G by Guess. The other component to our tempered enthusiasm was is in fact Europe, which has been a strong growth driver for Guess in FY10, and will come up against tougher operating margin comparisons in FY11 at a time of general unrest in the EU. Since November 30, shares of Guess have slid nearly 11% on fears of weakness in 4Q10 from poor weather in Europe and sluggish U.S. sales. We believe the risk reward has shifted favorable as a result of the sell-off, and are upgrading our rating to Buy." Shares of GES are down 91 cents to $42.65, a loss of 2%.