Benchmark Upgrades GSI Commerce To Buy

Benchmark has upgraded GSI Commerce (NASDAQ: GSIC) from Hold to Buy in its latest research report.In the report, Benchmark writes "Holiday ecommerce sales are off to a faster than expected start with the season to date up 12% y/y. We raised our domestic non-travel ecommerce spending estimate for 2010 from $141 billion to $143 billion, representing 10% y/y growth (prior 9%). Categories that drive GSI's revenue including Apparel, Healthy & Beauty, Toys and Sporting Goods should all post solid holiday gains. Although deep discounting, free shipping and price matching promotions remain prevalent, retail sales increased at an annual rate of 7.7% in November, indicating that, despite high unemployment at 9.8%, retail volumes are likely offsetting any pricing weakness, driving sales growth. GSI's comparable store sales could pace at around 20% y/y in 4Q10. We note that GSI's ecommerce contracts include tiered pricing agreements, with higher volumes resulting in incrementally lower take rates for GSI."Benchmark has also raised its price target from $25 to $29 on GSI Commerce, which closed yesterday at $22.41.