Barclays downgraded G-III Apparel (GIII) to Underweight from Equal Weight with a price target of $23, down from $30. The analyst cites lost revenue from customer store closures, lost licenses which will occur over a five-year period, and muted interest in owned brands for the downgrade. While G-III is making efforts to replace the lost businesses, it will take longer to scale new brands, the analyst tells investors in a research note. The firm sees an approximate 2% revenue headwind over a three-year period from the announced Macy’s (M) store closures and says lost licenses which will begin to impact the business over the upcoming five-year period. Barclays also believes the potential for acquisitions outside of the core women’s and outerwear businesses could carry additional execution.
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