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Market NewsCommentBlue Nile gets analyst downgrade

Blue Nile gets analyst downgrade

Shares of online jewellery retailer Blue Nile Inc. fell on Wednesday after an American Technology Research analyst downgraded the stock to "Sell," saying the company's average selling prices are likely to come under pressure in 2008, AP reported. Nile shares declined $2.61, or 4.7%, to $53.50. In the past year, the stock has traded between $36.66 and $106.16. In a note to investors, American Technology Research analyst Tim Boyd changed his rating and lowered his price target for the stock to $40 form $48, the report said. "Our basic rationale is as follows: although men will almost certainly continue to purchase diamond engagement rings for their fiancées, they are - on average - likely to spend less than they might have a year or two ago," he said. The analyst attributed this to a variety of factors, such as a lack of job security and a general decline in spending due to current views that US economic growth is slowing. He also noted that luxury retailers, including high-end jewellery retailer Tiffany & Co., felt material average selling price pressure during the most recent US recession in 2001. Boyd had upgraded Nile's stock to "Neutral" on Jan. 16. The analyst believes that analysts' 2008 estimates for the company are too high and said that an increase in the share price since mid-January presents a good time to sell or short the shares.

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