Jefferies & Co. upgrades to buy from hold

Jefferies analyst Randal Konik said on May 13 that the teen apparel retailer's risk profile is now more favorable. "It's time to look at Abercrombie again," Konik wrote in a research note to investors. Konik also raised his price target on the shares to $35 from $22.

"While we expect continued near-term sales/margin pressure, we believe the earnings revision cycle has reached a trough," Konik wrote.

AnnTaylor Stores (ANN)

UBS keeps neutral

UBS analyst Roxanne Meyer told Standard & Poor's MarketScope that AnnTaylor Stores sees first-quarter earnings per share [EPS] being above the Wall Street consensus estimate of a $0.25 loss, aided by better gross margin and cost cuts, partially offset by weaker-than-expected sales at its Ann Taylor division. However, Meyer notes that the company's merchandise remains a "work in progress" and same-store sales missed already low forecasts.

Meyer told S&P that while she's already seeing some more modern, sophisticated looks in the company's stores, they're likely not resonating with consumers. As such, she said the second half could still be a wildcard if sales continue to struggle. She put her $0.26 first-quarter loss per share and other estimates -- and $7 stock price target -- under review.

Sonoco Products Co. (SON)

KeyBanc downgrades to hold from buy

KeyBanc analyst Jason Brown noted on May 13 that Sonoco stock has gained 40% since Mar. 9, better than the S&P 500's 34% advance. Furthermore, global volumes for the Hartsville, S.C.-based company' tubes and cores business, which makes paperboard and plastic products as well as reels for wire and cables, are down as much as 20%.

Brown said that global weakness offsets strength in Sonoco's consumer-related businesses. "All in, while industrial demand continues to limp along, we are not anticipating a broad lift in global economies [i.e., volume trajectory] until 2010," he wrote in a May 13 client note.

"Even with the prospect of further restructurings to chip away at the cost structure we believe year-over-year profit contribution from the segments will be materially lower until we begin to lap easier comparisons [late 2009/early 2010] or an economic recovery materializes," Brown added.

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