Signet Jewelers Ltd.’s (Signet) NYSE stock increased by approximately 20.3% since our previous update report, dated 09 April 2009, due to positive investor sentiments associated with an anticipated economic recovery across global markets. However, going forward, we expect declining consumer spending levels, coupled with intensified retail competition, to impact the company’s topline growth. However, we expect margins to improve on account of cost saving programs of approximately US$100 mn during FY2010. As the NYSE stock target price no longer supports a HOLD rating at current price levels, we downgrade our rating from a HOLD to a SELL and will reassess our target price and rating in our next update report, once the company releases its 1Q 10 results. Although we expect a significant positive currency impact on the UK stock over the medium term, as the target price no longer supports a BUY rating at current price levels, we downgrade our rating from a BUY to a HOLD and will reassess our target price and rating in our next update report, once the company releases its 1Q 10 results.

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