Brean Murray Carret & Co. Downgrades Fossil (FOSL) to Hold; Target Reached; 3Q Upside Hard to See

Brean Murray Carret & Co. downgraded Fossil (NASDAQ: FOSL) to Hold.

Brean analyst says, "We are reducing our rating on FOSL after the stock surpassed our price target of $108; our estimates remain unchanged. We believe, with FOSL now trading at over 20X our 2012 EPS projection, that investors are assuming a return to material bottom line upside in the near term (we already assume YoY top line growth in 2H11 of over 20%); given that the cost pressures the company experienced in 2Q will remain just as high a deterrent in 2H11, and price increases will not be material until 2012, we see limited margin expansion potential and bottom line upside to our estimates and management guidance. As such, we are stepping aside to wait until a better risk/reward equation appears in FOSL."

For more ratings news on Fossil click here and for the rating history of Fossil click here.

Shares of Fossil closed at $109.99 yesterday.

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