Needham Maintains "Strong Buy" Guess (NYSE:GES) on Fundamentals

Needham & Company reiterated their "Strong Buy" on Guess (NYSE:GES) based on strong fundamentals.

Needham said, "Fashion right product and lean inventories have resulted in less promotional activity than LY which has been selectively utilized to draw traffic and increase conversion. At -13x our FY11 EPS estimate of $3.61, GES is trading at a discount to the sector average of -15x and a discount to its long term organic growth rate of 15% to 20% and 5 year historical P/E of -24x. We expect long term growth should be fueled by International opportunities, Licensing, and +DD U.S. retail square footage growth. Thus, we think GES should trade at least inline with the lower end of its organic growth rate of 15% to 20% and believe that fair market value for GES is at least 16x our FY11 EPS."

A price target of $59 is held by Needham on the retailer.