Citing international growth as a key catalyst, an analyst at JPMorgan upgraded The Men's Warehouse to 'overweight' from 'neutral' Friday. The target price for MW has been raised from $24 to $25.
This is a consolidation play, explained Brian Tunick, the analyst who made the call, while speaking on Friday's "Fast Money Halftime Report." Globally, corporate apparel is a $9 billion market. MW is an "interesting contrarian idea" in the US, where unemployment is at 9.5 percent, according to July's figures. The growth for MW, he said, is happening around the world.
At current levels, investors can buy MW at 12 times trough earnings that could reach $2.50 to $3 in earnings power over the next few years, Tunick said.
But it seems men are scaling back, noted Patty Edwards, principal at Storehouse Partners. Instead of buying suits, they are purchasing shirts and ties. She asked Tunick if that wouldn't affect The Men's Warehouse's bottomline. Tunick said MW has a 20 percent market share in tailored clothing, which includes shirts and ties. It also has a 25 percent market share of the tuxedo business.
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Tunick reiterated that MW is a contrarian play, but said he expects additional growth from the company in the near future.
Watch the video for Tunick's full comments—it starts at 1:30.
What's the Trade?
Edwards said MW is too contrarian for her. She can't see what the stock's upside is.
CALL TO THE FLOOR: ENERNOC
Based in Boston, EnerNOC provides energy management services for electric power grid operators and utilities. Its founder and CEO, Timothy Healy, spoke with CNBC's Melissa Lee on Friday's "Fast Money Halftime Report."
Many analysts loved the company's latest quarter, she said, because the services name raised guidance and said it expects a lot of catalysts in the near-term, including possible mergers and acquisitions activity.
Lee asked Healy when he'd have clarity on some of those catalysts because some analysts said the stock will be range bound until 2011.
Healy wouldn't provide a timeframe or reveal further details, but said EnerNOC can forecast that it's going to be a good year. They raised their guidance and expectations for both earnings and revenues. He expects further growth next year, as well.