Wunderlich Raises Price Target On G-III Apparel Group

Wunderlich Securities raised its price target on G-III Apparel Group, Ltd. GIII Wednesday from $100 to $105 and maintained a Buy rating after the company posted upbeat Q3 results.

Analyst Eric Beder raised his FY15 and FY16 EPS to $4.38 (from $4.15) and $5.25 (from $5.16), respectively...after GIII (GIII) reported highly impressive 3Q results and, as is their modus operandi, provided implied 4Q guidance which we view as highly conservative.”

Beder believed “the company continues to hit on all cylinders for Fall/Winter, with outerwear a key fashion winner and Calvin Klein (in dresses, handbags, sportswear, outerwear and active wear) taking further share in key department stores. When combined with the company's own stores registering solid positive comps, GIII remains a name worthy of a premium valuation and purchase by investors.”

“Management remains aggressive on the acquisition train, and believes they are in the best financial position in recent memory to complete a transaction, with the capacity to do up to a $1 billion purchase. That said, even with an acquisition management believes there are enough key organic growth opportunities to register double digit annual expansion in the near to midterm,” according to Beder.

The analyst note concluded that “with the strong Calvin Klein brand, dominant positions in key categories such as outerwear and dresses and emerging positions in sportswear and accessories and a growing retail network, that GIII is among the best positioned apparel plays in our universe and well worth of a premium multiple based on what we view as conservative projections. We remain buyers of GIII.”

The $105 price target was based on 20x FY16 estimated EPS of $5.25.

G-III Apparel Group, Ltd. soared Wednesday, trading at $94.52 in the afternoon, up 12.04 percent.