CHS - Chico's FAS: Valuation Beginning To Improve

• Chico's FAS has declined 15% year-to-date, and is now down more than 35% from its Q3 peak.
• However, fundamentally, the company continues to put up solid results, with the turnaround thesis clearly intact, and FY2021 set to be the first year of profitability since 2018.
• Based on the most recent decline, Chico's now trades at barely 11x FY2022 earnings estimates, and a high double-digit free cash flow yield, with the valuation clearly improving.
• Given the improving profitability, and what should be another strong year ahead, I would view any pullbacks below $3.95 as speculative buying opportunities.

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