Pier 1 Imports' Stock Rallies After Analyst Upgrade

MarketWatch Pulse

Shares of Pier 1 Imports surged 4.7% in afternoon trade, putting them on track to post a ninth gain in 10 sessions, after Oppenheimer upgraded the specialty home goods retailer, citing improving margins and the potential for a buyout. Analyst Brian Nagel raised his rating on the stock to outperform from perform, and set a $20 price target, which 41% above current levels. He said that as long-time investors have largely fled the stock, which has lost nearly half its value in the last 10 months, management has become more committed to running the business better and articulating the business model to investors. As a result, "prospects for improving operating margins should attract the attention of investors," Nagel wrote in a note to clients. He also said that while he doesn't believe a buyout is imminent, his analysis suggests the company possesses "many of the traits typically looked favorably upon by [private-equity] investors." The stock is down 8.8% so far this year, while the S&P 500 has gained 2.6%.

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