What: Shares of Finish Line Inc. (NASDAQ:FINL) were cruising higher today, up 13.3% at 3:14 p.m. ET after getting a round of analyst upgrades.
So what: The athletic-apparel retailer got an endorsement from Jefferies, which raised its price target from $22 to $24, saying that Finish Line was "setting up to go back on the offensive." The research group noted that the retailer was improving vendor relationships and updating stores. It also said the closure of 150 locations over the next four years should help drive profitability.
BB&T Capital Markets and Monness Crespi also lifted their rating to "buy" from "hold," and Canaccord Genuity reiterated its "buy" rating.
Now what: Today's upgrades come after Finish Line offered weak guidance for the current year in its earnings report last week. The company expects earnings per share of just $1.50-$1.56 against analyst expectations of $1.70. The poor guidance came in spite of a strong quarter, as comparable sales improved 4.6% and the company beat EPS estimates of $0.80 with a profit of $0.83 per share. Revenue also topped expectations.
Even with the diminished guidance, Finish Line is still expecting EPS growth of 20% or more along with mid-single-digit comparable sales growth. Considering that shares are still modestly valued after today's jump, the upgrades seem warranted as the company's momentum appears to be building.