Citi Trends initiated with a Buy at DA Davidson

DA Davidson analyst Michael Baker initiated coverage of Citi Trends with a Buy rating and $21 price target. The firm, which says Citi Trends targets an “underserved client base” with a differentiated store format that provides top line growth opportunities both through new store growth and comp store sales, calls Citi Trends “a good small cap value idea.” While the current profit outlook is depressed due to weakness in lower income customers, the firm thinks this is reflected in both earnings estimates and the stock price, the analyst added.