Raymond James Downgrades Pier 1 Imports
Pier 1 Imports (PIR ) sees 12-14 cents second-quarter loss per share. Raymond James cuts its recommendation on the shares to outperform from strong buy. Analyst Budd Bugatch says although he remains convinced a turn will come, Pier 1's business model is ultimately attractive and investors must face the reality of uncertain timing of turn. He says Pier 1 also noted higher promotional activity was needed to aggressively manage inventories. Bugatch says he's taking a more modest sales assumption for the remainder of fiscal year 2005 (January) and does not expect positive comps until the fourth quarter. He also raises his estimate of promotional activity, which affects both sales and margins negatively. He cuts 38 cents fiscal year 2006 EPS estimate to 10 cents, and 84 cents fiscal year 2007 forecast to 74 cents. He lowered his $27 price target to $24.