Kirkland's, Inc. (KIRK) - Bear of the Day

Kirkland's, Inc. (KIRK) again reported weak third-quarter 2011 results with earnings of $0.11, which was below the Zacks Consensus Estimate by a penny. The company's healthy balance sheet supports its investment to bring about a better merchandise mix in its stores.

However, the company's susceptibility to the global economic downturn, coupled with stiff competition, severely undermines the company's future growth prospects and profitability.

Our long-term Underperform recommendation on the stock indicates that it would perform well below the broader market. Our target price of $13.00, 10.4X 2011 EPS, reflects this view.
 
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