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Shares of Rent-A-Center (NASDAQ: RCII) are down 11% as of noon EST Tuesday, after a recent CFO resignation and analyst downgrade.
Analysts at Raymond James downgraded Rent-A-Center from Strong Buy to Market Perform and removed the stock's price target of $16. This comes after recent news that Guy Constant resigned from his position as executive vice president and chief financial officer of the company. Taking on this role during the interim will be Maureen Short.
I'm bearish on Rent-A-Center, but this news seems like a non-event and today's drop a potential market overreaction, based on the information available at the time of this writing. The executives playing musical chairs really doesn't change the investment thesis of the company. As to the downgrade by Raymond James, it is, in my opinion, simply belated news. Furthermore, a glance at the company's price over the past five years suggests its investment thesis is one that hasn't convinced investors to buy in.
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