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Non-Tech : BFCI - Braun's Fashions

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To: J. Lawson who wrote (69)12/3/1997 5:57:00 PM
From: J. Lawson  Read Replies (1) of 88
 
>>>some selected items from the J.C. Bradford report:<<<

earnings estimate 3rd Q .46
earnings estimate 4th Q .22
FYE 2/98 estimate .92

fye 2/99 estimate 1.10

>>after sluggish start, Q3 sales rebounding robustly with good potential for positive EPS surprise.
>>solid sales momentum should continue into Q4.
>>stock sells at dramatic valuation discount to the industry average despite equivalent if not better slaes and earnings monentum.

>>Braun's valuation of 10.5x this fye EPS is sharply out of sync with the current industry average of 23.7x (the average of 40 specialty apparel retailers). The company's small market capitalizaton, under $50 million, and its relatively recent escape from Chapter 11 are probably the key issues. The company's balance sheet is solid, however, and its current sales momentum certainly would put it in the top half of the industry average. Moreover, our
expectation of another 18% EPS gain in 1998 would put it among the upper one-third in this segment. We believe the solid comparable same-store gain in november and a positive EPS surprise for Q3 could produce a quick 25-30% price spike. we recommend aggressive purchase of the stock at current levels.

ps. J.C. Bradford & Co. makes a market in this security.

jl
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