JP Morgan Comments On Signet Jewelers Following Management Meetings

JP Morgan recently hosted several investor meetings in NYC with Signet Jewelers SIG CEO, Mike Barnes, CFO, Ron Ristau and IR Tim Jackson and came away very upbeat on how management plans to evolve the company longer-term. Exclusive brands now make up ~25% of the business, while total brand penetration is now > 50%. A rapidly growing bridal business is bringing in steady traffic from a younger demographic, and the overarching theme is that this is no longer a highly commoditized, older generation focused business model. The business is evolving, and we believe is well positioned to continue taking share in what is now a highly rationalized playing field. The key topics that seem to be on investors' minds are what are the plans on capital re-deployment, what is happening with SG&A growth, how will cost inflation impact the P&L this year and where can margins go over time. JP Morgan continues to believe that, backed by its evolving business model SIG represents a very attractive market share story, as they look very well positioned to continue taking share in an up-trending industry for the foreseeable future. Between their scale, in-house credit operations ad balance sheet strength, JP Morgan sees a number of ways that SIG shares can continue to move higher from here. JP Morgan reiterates its OW rating and is raising estimates and its PT to $52 from $50. SIG closed Friday at $46.16