Benchmark Upgrades Blue Nile and Raises PT
Benchmark has published a research report on Blue Nile, Inc. (NASDAQ: NILE) and has upgraded the company to Hold from Sell.
In the report, Benchmark writes "We raise our 2011 forecast with revenue potentially rising by 12% y/y to $376 million as consumer spending recovers, although discretionary spending categories may lag the broader industry. Our EBITDA estimate rises from $35 to $37 million, up 16% y/y, with EBITDA margin expanding by 30bps y/y, potentially inhibited by ongoing promotional activity and rising diamond prices. Our 2011E EPS is $1.15. Free cash flow per share could be $1.70. Despite the impressive online holiday season and positive commentary from CEO Diane Irvine citing record Thanksgiving and Black Friday sales – albeit somewhat aided by promotional activity – consensus has remained near the mid-point of fullyear 2010 revenue and EPS guidance of $324-$333 million and $0.94-$0.99, respectively. Given muted expectations, we see limited risk to 4Q10 results."
Benchmark has also raised the price target from $31 to $46 on Blue Nile Inc., which closed Friday at $55.46.
