NEW YORK –
Shares of Blue Nile Inc. rose on Tuesday after an analyst upgraded shares of the online jewelry retailer on a decline in the share price, low inventory and little exposure to foreign currencies.
Shares rose $3.66, or 14.7 percent, to end at $28.65.
American Technology Research analyst Tim Boyd upgraded the stock to “Neutral” from “Sell” and said the company is a “best-in-breed, market-share-gaining franchise that leverages a virtually inventory-less model to generate high levels of free cash flow.”
Boyd said a decline in the share price adequately reflects the company’s soft outlook for the fourth quarter and downward revisions to Wall Street expectations for the company in 2009.
So far this year, Wall Street analysts have already slashed 2009 profit and revenue forecasts by 25 percent, and the stock has declined 63.3 percent.
“This suggests that even if 2009 Street estimates are still too high, which we believe they are, the bulk of the estimate revisions are already behind us,” Boyd wrote in a client note.
Boyd also said Blue Nile (nasdaq: NILE – news – people ) has very little exposure to foreign currencies. In the second quarter, international sales accounted for just 11 percent of total revenue.
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Source: http://www.forbes.com/
