Ann Taylor shares jump on analyst take

Shares of Ann Inc. jumped in trading Thursday after an analyst predicted a strong holiday season for the operator of Ann Taylor and Ann Taylor Loft stores.

THE SPARK: Jefferies analyst Randal Konik said in a research note that he is very confident in the continued strength of the company's business after attending its holiday 2012 product preview.

"The fashion looks great, price points are more alluring, promos are being controlled and store fleet is being optimized," Konik wrote.

He said the company should be well-positioned for the holidays and beyond and raised his price target to $46 from $38, implying he expects shares to rise 21 percent over the next year.

THE BIG PICTURE: The holiday season can be a make-or-break period for retailers. If they fail to find the right product line up or prices to entice shoppers, it can weigh the company down with heavy inventory and a negative reputation for multiple seasons following.

THE ANALYSIS: Konik said that the New York company is using a better mix of colors and patterns versus last year and a heavier emphasis on value, both of which should resonate well with shoppers.

Additionally, he said Ann's management had a positive tone and business appeared to be on track.

In the second quarter ended in July, Ann reported a 24 percent jump in net income and lifted its revenue outlook for the full year.

SHARE ACTION: Shares increased $1.40, or more than 3 percent, to $39.39 and earlier set a new year high of $39.41. Its shares have traded between $21.26 and $38.74 in the 52 weeks before Thursday.