Ahead of the Bell: Pacific Sunwear shares upgraded

Analyst raises rating on Pacific Sunwear to 'Outperform' on improving product focus, new CEO

• On 9:22 am EDT, Tuesday October 13, 2009

NEW YORK (AP) -- Pacific Sunwear of Calif. Inc. has a new CEO, better product focus and easier year-ago comparisons, so long-term investors should begin to consider the stock, an analyst said Tuesday and upgraded the company to "Outperform."

FBR Capital Markets analyst Adrienne Tennant said in a note to investors that the teen retailer is better at controlling inventory and has returned to emphasizing brands as well as introducing new brands.

In June, Pacific Sunwear hired Gary H. Schoenfeld, a former Vans chief executive, to replace CEO Sally Frame Kasaks.

"With a new CEO, easier compares in the second half of the year, and new brands that could attract an incremental customer, we believe deep-value investors should begin to look at Pacific Sunwear," Tennant said.

Still she said the company is reversing many initiatives it started over the past 12 to 18 months, so uncertainties remain, but if sales begin improving, the stock is likely to rise as well.

She raised her rating to "Outperform" from "Market Perform" and raised her price target to $9 from $6. The shares rose 42 cents, or 6.8 percent, to $6.56 in premarket trading Tuesday.