AnnTaylor Stores (NYSE:ANN) Continues as Top Pick of FBR

AnnTaylor Stores (NYSE:ANN) remains the Top Pick of FBR, citing among a number of reasons, comps trending toward mid single digit positive.

FBR says, "We had the opportunity to preview Ann Taylor Loft's summer assortment yesterday evening in New York City. The product for spring looked great with pretty use of color and pattern, attractive silhouettes, and fun jewelry. There is plenty of pink in both florals and stripes, as well as updated use of animal print paired with pops of color, beautiful fashion tees, cool greens and blues, neutral, white, and navy.

"So why do we continue to like ANN and highlight it as our top pick? We feel confident comps are trending mid single digit positive or better, lead mostly by ATS at this point. We believe it is likely ANN will beat 4Q estimates. We think the company is in the early stages of a product lead turn around. We believe this turnaround will drive strong comps and continued margin recovery. The company is locked in on most of its costs for 2011. Management is tightly controlling expense, and thus positive comps drive outsized leverage. The company plans to be active repurchasing its stock. The stock is inexpensive, with a 2011 EBITDA multiple of 3.6x. We have well above consensus estimates for 2011 and we wouldn't expect the company to guide there, but we absolutely believe our estimate is achievable."

FBR Capital reiterates an "Outperform/Top Pick" on AnnTaylor Stores (ANN), which closed Wednesday at $22.06, up $0.55, or 2.56 percent.