Higher Ann Taylor Store Margins Boost ANN Stock
AnnTaylor (NYSE:ANN) is a leading specialty retailer of women’s apparel, shoes and accessories in the US. It competes with Aeropostale (NYSE:ARO), American Eagle Outfitters (NYSE:AEO), J.Crew Group (NYSE:JCG), and Limited Brands (NYSE:LTD). We currently have a Trefis price estimate of around $22 for AnnTaylor’s stock, about 33% above the current market price of around $16.
Trefis members have created forecasts for two key drivers of AnnTaylor’s (NYSE:ANN) stock over the last week: (1) Ann Taylor Stores EBITDA Margin and (2) Revenue per Square Foot. The members’ forecasts suggest that Ann Taylor Stores EBITDA Margin will trend above the Trefis forecast, while Revenue per Square Foot will be in line. These projections indicate a combined upside of around 3% for AnnTaylor’s stock.
We estimate that Ann Taylor Stores constitute around 15% of the $22 Trefis price estimate for ANN’s stock. Hence the stock is quite sensitive to (1) Ann Taylor Stores EBITDA Margin and (2) Revenue per Square Foot. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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1. Ann Taylor Stores EBITDA Margin
The average of forecasts for Ann Taylor Stores EBITDA Margin created by Trefis members indicated a projected decrease from around 12% in 2010 to close to 10% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from around 11% in 2010 to around 8% by the end of the Trefis forecast period. The member estimates imply an upside of 3% to the Trefis price estimate for AnnTaylor’s stock. In the past, Ann Taylor Stores EBITDA Margin has decreased from close to 11% in 2005 to around 8% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of AnnTaylor’s stock to Ann Taylor Stores EBITDA Margin.
Our complete analysis for Ann Taylor Stores EBITDA Margin is here.
The average of forecasts for Revenue per Square Foot created by Trefis members are in line with Trefis estimates. The baseline Trefis estimate projects an increase from around $304 in 2010 to around $363 by the end of the Trefis forecast period. In the past, Revenue per Square Foot has decreased from $460 in 2005 to around $276 in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of AnnTaylor’s stock to Revenue per Square Foot.