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Why Piper Jaffray Thinks Vince Holding Could Be A Compelling Product Turnaround Story

Piper Jaffray upgraded shares of Vince Holding Corp VNCE 0.31% from Neutral to Overweight rating. The brokerage also lifted its price tag on the stock from $6 to $8 pointing out a compelling product turnaround story.

Analysts Erinn Murphy and James House believe the company stands to gain from the return of the founders, Rea Laccone and Christopher LaPolice, besides the hiring of Brendan Hoffman as CEO. The lead analyst believes they could be key to "architect a product turnaround."

"In addition, they are lessening their dependence on off-price--which we believe is tracking toward the better-end of their goal to achieve 20% by year-end. While Fall/Holiday are the first collections the founders have impacted, early reads are positive. Our checks suggest Vince had a solid Anniversary Sale at Nordstrom and has been building momentum at Saks & Neiman," analysts told their clients in a note.

Piper Jaffray thinks shares of the company weren't valued correctly citing enhanced new product traction and visibility towards a steady top-line.

The brokerage believes Vince is in the process of rationalizing its wholesale unit as the conditions are challenging since retailers having a tight control over the inventory. The analyst pointed out that the company still enjoys the No. 1 brand status at different retailers like Nordstrom, Saks & Neiman. At Bloomingdales, it enjoys the No. 2 position thus suggesting enough opportunity to expand the brand.

On Monday, the stock traded higher by $0.62, or 11.01 percent, to $6.25.

DateFirmActionFromTo
Aug 2016PiperJaffrayUpgradesNeutralBuy
Dec 2015Bank of AmericaMaintainsUnderperform
Sep 2015BarclaysMaintainsEqual-weight

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