In early trade the Premier Investments Limited (ASX: PMV) share price has tumbled lower a day after the release of its full-year results.
At the time of writing the specialty retailer's shares are down 5% to $12.70.
Why are its shares lower today?
Despite the majority of leading brokers responding positively to yesterday's result and being impressed by the resilience the company showed in a tough retail environment, investors appear to have focused on a note out of Morgan Stanley.
Whilst Citi, Credit Suisse, Deutsche Bank, and UBS all have buy ratings or equivalents on its shares, a note out of Morgan Stanley this morning reveals that its analysts have an equal-weight rating on its shares.
Furthermore, the broker has cut the price target on Premier Investments' shares from $14.00 down to $13.20.
According to the note, Morgan Stanley is impressed with the performance of the company's Smiggle and Peter Alexander brands, but remains concerned by the pressures that its core brands continue to face.
Should you buy the dip?
Whilst I agree with Morgan Stanley that the company's core brands are a concern and are acting as a drag on its performance, I do feel that Smiggle, Peter Alexander, and its e-commerce platform will more than offset this weakness.
Furthermore, management is working hard to turn around the performance of its core brands and has had early success with the Portmans and Jacqui E brands.
As a result, I think that Premier Investments is trading at an attractive price and would be a good long-term buy and hold investment in the retail industry alongside the likes of Noni B Limited (ASX: NBL) and Greencross Limited (ASX: GXL).
