Jefferies Raises Price Target on Zumiez (ZUMZ), But Sits Back on High Valuation

Jefferies is maintaining its Hold rating on shares of Zumiez, Inc. (NASDAQ: ZUMZ), but is raising its price target from $25 to $29 following recent meeting.

The firm sees upside to the company Q2 guidance given its differentiated merchandise and sales culture from other mall based teen retailers. It notes that with expenses under tight control, upside to sales and earnings are likely.

An analyst at Jefferies reported that, "Management was candid regarding sourcing cost pressures ahead and admits there is uncertainty with consumer acceptance to rising price points. However, to date consumers have accepted limited price increases, which is encouraging and AUR trends are now positive after 2+ years of declines."

Jefferies current Q2 EPS estimate is $0.03 and its FY12 estimate if $1.07.

For more ratings news on Zumiez, Inc. click here and for the rating history of Zumiez, Inc. click here.

Shares of Zumiez, Inc. closed at $29.56 yesterday.

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