USB Piper Downgrades J Jill to 'Outperform'

Analyst Jeffrey Klinefelter sees less earnings visibility for the women's retailer as mall traffic remains erratic

USB Piper downgraded J Jill Group (JILL ) to outperform from strong buy.

Analyst Jeffrey Klinefelter says the downgrade is based primarily on valuation. He says J Jill is trading at 20.5 times his forward four-quarters earnings per share estimate, compared with the stock's six-year historical average of 19.8 times estimates. Klinefelter plans to adjust his 40 cent fourth quarter earnings per share, and $1.25 2003 estimates in light of the company's new guidance.

He says the company's increasing presence in the retail channel will result in less earnings per share visibility as mall traffic remains erratic. He also notes J Jill's retail stores contributed 37% to the top line in the third quarter, and he sees a rise to 50% in the first half of 2003. He lowered his $32 target to $28.

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