UPDATE: Morgan Stanley Downgrades Blue Nile to Equal-Weight on Tempered Growth Outlook
Morgan Stanley downgraded Blue Nile (NASDAQ: NILE) from Overweight to Equal-weight and removed the price target of $48.00.
Morgan Stanley commented, "Changing our rating to Equal-weight, relative to our coverage universe: We still like the company, but we believe the stock will perform more inline with its peers until it can show sustained acceleration of non-engagement sales. We are concerned that the ultimate cost of driving non-engagement sales may be higher than we expected. … We are reducing our base case fair value to $36, which is driven by a DCF valuation analysis assuming a 14% WACC and 4% perpetual growth rate."
Blue Nile closed at $30.30 on Wednesday.
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