Piper Jaffray Downgrades Citi Trends To Underweight, Lowers PT To $19 (CTRN)

Piper Jaffray downgraded its Citi Trends CTRN rating to Underweight from Neutral and lowered Citi Trends' price target to $19 from $24 in a research report published today. In the report, Piper Jaffray states, "Based on a proprietary analysis of inflationary pressure and stimulus benefits for the low income consumer, we believe it will be difficult for CTRN customers to maintain prior spending on discretionary categories in 2011. Our analysis shows a .72 correlation between CTRN comps and y/y changes in household income for low income consumers and note CTRN comps generally underperform wage growth. In addition, we note sharp increases in the price of gas and food will be more problematic as it is close to 30% of the entire budget versus 13% for the average household." Shares of Citi Trends were at $20.73 in pre-market trading at the time of posting, down 8.88% from Tuesday's market close.