Piper Jaffray Initiates Coverage on Coldwater Creek (CWTR) with a Buy; High Expectations May Present Investors With Buying Opportunity

June 30, 2009 7:43 AM EDT

Piper Jaffray & Co. initiates coverage on Coldwater Creek Inc. (Nasdaq: CWTR) with a Buy. Price target $9.

Piper analyst says, "We are initiating research coverage on CWTR shares with a Buy rating in the belief that Coldwater Creek will begin a pattern of beating Street expectations in the second half of this year--not the second quarter--as product initiatives take hold, consumer demand begins to stabilize, and margin recovery ensues. Longer-term, we view specialty stores, such as Coldwater Creek, as a preferred destination over traditional department stores among consumers; as such, we anticipate unit growth could re-accelerate once we emerge from the macro-economic mire that is the current U.S. economy."

"With the recent rise in CWTR's stock price, we believe investors are expecting a potential inflection point in upward earnings revisions beginning with FQ2. Given the significant quarter-specific headwinds facing CWTR in FQ2, we believe FQ2 results will likely be closer to our per-share loss estimate of ($0.03) than a recent competitor's upward revision calling for a gain of $0.03. This reality could cause near-term pressure on CWTR shares and presents a unique opportunity to purchase CWTR ahead of what we believe will be significant upside relative to current expectations in the second half of 2009."

To see more analyst ratings on CWTR Click Here.

Coldwater Creek Inc. is a specialty retailer of women's apparel, accessories, jewelry and gift items.

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