UBS Warburg Cuts Furniture Stocks Outlook
UBS Warburg cut its targets on Ethan Allen (ETH ), Furniture Brands (FBN ) and (Haverty Furniture ) (HVT ).
Analyst Margaret Whelan says feedback from industry contacts suggests weak demand and continued price pressure. She says she expects these three companies to guide earnings per share downward as they report their third quarter results, starting next week.
Whelan believes imports pose a threat as retailers are increasingly sourcing direct from Asia. She says she is warming up to the group, but will remain on the sidelines until more realistic earnings per share estimates are established. She sees $1.11 2002 earnings per share for Haverty, and $1.30 earnings per share for 2003. She cut her $22 Haverty target to $17.
Whelan cut the $45 Ethan Allen to $39, and trimmed the $38 Furniture Brands target to $36. She rates Haverty and Ethan Allen as buy, but she says hold Furniture Brands.