The Cowen and Co. report follows recent news from the Wet SealInc. that the company's comparable store sales climbed 10.9% forthe five-week period ended April 7, compared with the five-weekperiod ended April 8 last year, when Wet Seal reported a 16.2%increase in comparable store sales. Net sales for the five-weekperiod increased to $57.6 million from $47.3 million the yearbefore.

Cowen and Co.'s analysis says that significant appreciation ofWet Seal's stock "could hinge on indications of improvingprofitability contribution from the Arden B. division." Theresearch firm believes that the company faces a long-term"opportunity to grow square footage and expand operating marginsunder the completely reconstituted management team." It alsobelieves that other factors, including changes to pricingstrategies at the core Wet Seal brand and improving traffic trends"should drive further operating profitability gains and modest compstore sales growth."

Cohen and Co.'s bottom line is that it expects Wet Seal sharesto "outperform the market by at least 20% in the next 12 months."It also says that the company "is well positioned for several yearsof at least double-digit annual square footage growth."