Ahead of the Bell: Analyst raises PT on Talbots

NEW YORK (AP) _ An analyst raised her price target on shares of The Talbots Inc. to reflect stronger second-quarter same-store sales and margins as the apparel retailer embarks on a turnaround plan.

D.A. Davidson analyst Crystal Kallik raised her price target to $12.50 from $7.50, implying upside of 5.8 percent to Wednesday's closing price.

Kallik also raised her estimates for the second quarter and fiscal 2008.

"We believe the company has managed through its credit setbacks and is in the process of replacing its letter of credit facility," Kallik wrote in a client note.

Talbots has received a a $50 million unsecured subordinated term loan, following decisions by HSBC and Bank of America to phase out lines of credit.

Kallik has a "Neutral" rating on the stock, given heavy promotions and a softening U.S. economy that has crimped sales for many retailers.

Talbots has said it will cut the job of chief operating officer and slash 129 jobs, about 9 percent of its corporate staff, to try and save $14 million a year.

Talbots sells apparel for women, men and children, along with shoes and accessories. Shares of the company have risen about 2.1 percent so far this year. The company is scheduled to release second-quarter results on Aug. 27.