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Citi analysts have upgraded their recommendation for Specialty Fashion Groupfollowing the sales of Autograph, Katies, Millers and Rivers to Noni-B for $31 million.
The broker had previously given the company a "neutral" recommendation, upgrading it to a "buy" and increasing the target price from 48¢ to 75¢.
Citi says that the sale would be good for SFG as it retains ownership of its strongest brand, City Chic.
The broker values City Chic at $117 million and says that sales are growing at 5-10 per cent with the potential for the business to generate EBITDA of $19-20 million in FY18e.
City Chic has an expanding international business, primarily in the US and Citi says it expects continued expansion for the business's online sales and offshore distribution.
SFH Price at posting:
60.5¢ Sentiment: Buy Disclosure: Held
