UPDATE: Citigroup Initiates Tumi Holdings at Buy on Growth Outlook

Citigroup initiated coverage on Tumi Holdings TUMI with a Buy rating and a $26 price target. Citigroup said, "Buy Tumi on +20% global growth given low distribution saturation levels, credible lifestyle brand equity, fixed cost leverage, new mgmt, and gross margin upside on increasing own-retail penetration. Price target $26 on 21x which implies a +26% return. Solid fundamentals: net cash of $18mm, est. $30mm FCF, op margin 18% vs. peers average in low 20s. High margin growth to con't as we believe in Tumi's brand equity/recognition." Tumi Holdings closed at $21.40 on Thursday.