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Standpoint Research Downgrades True Religion Apparel (TRLG) to Hold

April 29, 2011 10:07 AM EDT
Get Alerts TRLG Hot Sheet
Price: $31.98 --0%

Rating Summary:
    1 Buy, 7 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Standpoint Research downgraded True Religion Apparel (NASDAQ: TRLG) from Buy to Hold.

The firm commented, "This is a tough call to make. TRLG is up 14% today on its Q1 earnings report from Thursday after-the-close and has already hit the 2012-2013 price target we set in November; see line 26 in the table below. TRLG is up 52% since our November 22, 2010 recommendation and beat the S&P-500 by more than 3800 bps. As I wrote in our eleven-page report from Q4 (attached), this company will double its store count and share price by 2015. We have in less than six months gotten half of the gain I was looking for over the next 3-5 years. The shares still look attractive here at 16X trailing twelve months earnings, 14X estimates for next year and a PEG ratio < 1. That being said, this stock crossed $30 in 2008, 2009 and 2010, only to be followed each time shortly thereafter with a 30% correction/decline. We are overweight consumer discretionary and want to take this opportunity to reduce that weight. This recommendation was originally intended to be a core long-term holding of ours, but given the 50% run, we can no longer leave our highest rating attached to this name. We will move to the sidelines and hope to get a chance to reinstate this name if it corrects to the mid-$20s."

For more ratings news on True Religion Apparel click here and for the rating history of True Religion Apparel click here.

Shares of True Religion Apparel closed at $27.79 yesterday.


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