Toys R US, page-4

Citi has a sell rating; from The Australian

PMBaby Bunting faces deflation risk — Citi

Citi has cut Baby Bunting to Sell and slashed its target price to $1.20 a share because it expects a tougher operating environment in the short-term.

“We downgrade Baby Bunting to Sell due to increased risk that its key competitor Babies R Us/Toys R Us could shut its Australian stores which would likely lead to industry price deflation as store closures are generally preceded by stock clearance,” Citi analyst Sam Teeger says.

“We see short-term downside risk to Baby Bunting’s sales and gross margins. Longer-term, the potential exit of a key competitor should be positive for Baby Bunting as the company continues to be run by a highly capable management team with the oversight of an experienced board.”