Susquehanna Upgrades Columbia Sportswear (COLM) to Neutral; Valuation Call

November 11, 2009 8:57 AM EST

Susquehanna upgrades Columbia Sportswear (Nasdaq: COLM) from Negative to Neutral.

Susquehanna analyst says, "We are upgrading COLM shares to Neutral on valuation with the share price down ~15% since its high coming out of the 3Q earnings release ($45). With management's willingness to drive innovation and greater relevance with its Omni platform, we now see less downside at current levels as valuations begin to trend more in line with historical averages. Last night we attended a product unveiling of the latest technology, Omni Heat, a visible thermal technology designed to increase body heat retention by 20%. While relatively small in terms of size at 89 styles for an October 2010 launch, its pricing ($300 jackets) and distribution is focused on outdoor specialty retailers - channels of relative weakness for the company. We also remain encouraged by the turnaround in U.S. backlogs for spring (essentially flat). With that said, the near-term outlook remains difficult with continued promotions, limited commitment from retailers, and a -7% currency neutral overall backlog decline (the entire decline internationally), which we expect to drive negative sales through at least 1Q10. At the same time, we believe COLM needs to earn back shelf space against formidable competitors and in-house private label brands in a slower growth environment. Lastly, we also remain concerned that there could be increased spending planned as the company invests in new product initiatives."

To see more analyst ratings on COLM Click Here.

Columbia Sportswear Company engages in the design, sourcing, marketing, and distribution of outdoor apparel, footwear, and related accessories and equipment in the United States, Canada, Europe, the Middle East, Africa, Latin America, and Asia Pacific.

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