Coldwater Creek (NASDAQ:CWTR): Nowhere to go but Up?

After reporting third quarter results last Thursday, Coldwater Creek (NASDAQ:CWTR) revealed losses weren't as bad as they were expected to be, with losses coming in at $10.9 million, or $0.12 a share. In 2009 in the same quarter, losses were $34 million, or $0.37 a share.

With little in the way of expectations going forward, FBR Capital sees any good news as helpful, and maintains their "Outperform" rating on them.

FBR said, "We have been underwater, as it were, in this recommendation since the company’s October preannouncement. The reason we stayed after the bad news was that it seemed to be all priced in. We hoped that things would get better with the rest of the industry in November. It seems that has not happened and the merchandise turn is likely a ways off. However, we believe management change will drive improved performance. We also think earnings are at trough. The bottom line is simply that if they just break even next year, the stock is cheap on EBITDA in our view. With the reduction in capex for next year, free cash flow generation will likely be significant. And now no one is expecting anything good, so any improvement whatsoever will likely be rewarded.

"Based on company’s guidance, we are revising our 4Q10 EPS to ($0.27) from ($0.06). We are also revising our CY11 EPS estimate to $(0.00) from $0.15."

Coldwater closed Friday at $3.26, dropping $0.18, or 5.23 percent. FBR has a price target of $6 on the specialty retailer.