Brean Capital Believes TLYS Won’t Stop Here

By George MacDonald

Brean Capital analyst Elizabeth Pierce maintained a Buy rating on Tilly’s Inc. (NYSE: TLYS) today and set a price target of $18. The company’s shares opened today at $13.60, close to its 52-week high of $14.67.

Pierce observed, “TLYS ended FY14 on a strong note with comps and earnings beating our estimates as well as the Street’s. Moreover, with upcoming easy compares, greater product differentiation and an improving macro landscape, we believe the cycle of good news has just started. TLYS is also one of the few specialty retailers that still has significant organic growth, both 4-wall and direct, both of which bode well for meaningful top-line growth. Finally, its history of strict financial discipline and limited infrastructure spending on the near-term horizon sets the stage for operating margin leverage. Accordingly, we reiterate our Buy rating and our $18 TP . Our $18 target price is based on a multiple of 24x and our FY16 EPS of $0.75 and a PEG ratio of 1x”

Tilly’s Inc. has an analyst consensus of Moderate Buy, with a price target consensus of $15.67.

Based on Tilly’s Inc.`s latest earnings report from October 31, the company posted quarterly revenue of $131.3M and quarterly net profit of $5.11M. In comparison, last year the company earned revenue of $139.9M and had a net profit of $5.42M.

According to TipRanks.com, Pierce is a 4-star analyst with an average return of 12.1% and a 57.4% success rate. Pierce covers the Services sector, focusing on stocks such as Christopher & Banks Corp., Urban Outfitters, and American Eagle.

Tilly’s Inc is a growing destination specialty retailer of action sports inspired apparel, footwear and accessories. Its registered trademarks include Ambitious, Blue Crown, Division 7 and Eldon.