99 Cents Only Stores Inc. finished out a strong week with its shares rising nearly 5 percent Friday after a research firm upped its target price for the stock on expected strong earnings.
Analyst James Ragan of Crowell Weedon & Co. said the City of Commerce discount retailer should have full year earnings of 52 cents per share, up from a previous estimate of 39 cents. He increased his target price on the stock to $15 from $13 per share.
"We believe that 99 Cent Only Stores will remain very well positioned in the current soft consumer spending environment," wrote Ragan, in the research note. "The combination of revenue growth and margin expansion should drive sustained earnings growth and positive cash flow."
On Wednesday, 99 Cents Only Stores released its earnings for the fiscal fourth quarter ended March 28, easily beating estimates. It reported net income of $7 million (10 cents per share), compared with a year-earlier loss of $4.4 million (6 cents). The earnings prompted Wedbush Morgan analyst Joan Storms to reiterate her "Buy" rating on the stock.
Shares of the company closed up 56 cents, or 4.5 percent, to $13.31 Friday on the New York Stock Exchange. They rose 30 percent for the week after starting out at $10.02.
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