BoA Merrill Lynch has upgraded retailer Pacific Brands Ltd (PBG) to Buy from Underperform

BoA Merrill Lynch has upgraded retailer Pacific Brands Ltd (PBG) to Buy from Underperform. The broker has increased earnings estimates for FY13 and FY14 by 9% and 18% respectively as it believes the renewed strategic direction of the company will see the strength of its brands materialise. The past three to four years have focused on cutting the cost base and opportunities now exist to grow sales through investment in key brands and acquisitions. As such, the price target has been raised to $1.05 from 40c (current price $0.82) with a price-to-earnings ratio of 9.94.