Zacks Investment Research upgraded shares of Iconix Brand Group Inc. (ICON) from NEUTRAL to OUTPERFORM on June 12, 2013, with a target price of $36.00.
We are upgrading our recommendation on Iconix to Outperform from Neutral on the back of solid first quarter 2013 results. Earnings of $0.54 per share beat last year's result by 26% and the Zacks Consensus Estimate by 5.9%. Iconix's revenues in the quarter also surged 19% year over year and surpassed the Zacks Consensus Estimate by 4%, driven by a spate of accretive acquisitions made in the recent past. The company also raised its view for 2013, thus supporting the upgrade. Iconix successfully completed three acquisitions in the past six months and in addition, has added iconic football brand Umbro and lifestyle brand Lee Cooper to its portfolio. Most recently, Iconix acquired the remaining 49% interest in IP Holdings Unltd LLC to get hold of Ecko brands. We believe Iconix's strategic acquisitions and consistent expansion of licensing agreements will help maintain strong business in the U.S. and Europe and help increase its penetration in the emerging markets.
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