Lazard: Bare Escentuals Remains Solid Long-Term Buy

NEW YORK—Bare Escentuals (NASDAQ:BARE) remains a cheap, solid, long-term buy, according to an analysis by Jacklyn Rider, Healthy Lifestyle Research Analyst, Lazard Capital Markets. Rider noted despite the reported EPS of $0.25 just missing the consensus estimates of $0.26, several items including sales ($130 million, up 3 percent) and a 30 percent EBIT margin fell short of expectations. As such, Lazard is also expecting conservative 2009 guidance from BARE, and lowered its price target from $14 to $8, assuming the shares trade at eight times the 2010E EPS. Additionally, Rider expects the company’s plan of releasing more than 100 new products in 2009, creating more product differentiation at retail, and spending more on marketing to be a smart move to protect its base and expand its consumer reach; risks include the weakening economy and stronger competition.