JP Morgan Comments On Men's Wearhouse After Reporting Strong Earnings

JP Morgan continues to believe that Men's Wearhouse MW is in the early innings of what could be a multiyear replenishment cycle within its core suit business, helping drive comp acceleration across all three of its concepts. Yesterday, the company substantially raised its Q1 EPS outlook to $0.47 - $0.50 as comps came in more than double their initial plans. MW appears to have worked out the kinks at K&G, while accelerating comp trends at both TMW and Moores and finally has all three businesses firing on all cylinders for the first time in 5 years. JP Morgan's view is that Men's Wearhouse is coming off of trough productivity and operating margins and now appears to be on the path to potentially return to double-digit margins over the next few years. JP Morgan is raising its 2011/2012 EPS estimates to $2.02/$2.30, and the PT moves higher to $36. It has an Overweight rating given the compelling margin recovery that it believes is underway. MW is trading higher at $32.50