True Religion Rallies on Positive Notes
Thursday January 5, 3:38 pm ET
True Religion Apparel Shares Rally to New 52-Week High on Trio of Bullish Brokerage Calls
NEW YORK (AP) -- True Religion Apparel Inc. shares rallied Thursday to a fresh 52-week high, bolstered by a trio of bullish brokerage calls on the company, a Los Angeles-based designer of jeans that sell for up to $359 a pair.
Shares of True Religion, which started trading on the Nasdaq market in August, jumped $2.75, or 16.3 percent, to $19.61 on the Nasdaq, where it was among the top percentage gainers in afternoon trading. Earlier, the stock reached a new high of $19.66, surpassing the previous 52-week high of $18.25 reached July 29.
All three brokerage notes projected strong growth for True Religion, driven by the recent popularity of so-called "premium" denim jeans, new products like fleece tops, and expected international growth.
The company sells jeans, jackets and other clothes under the True Religion brand to upscale department stores like Neiman-Marcus, Saks, Bloomingdales and high-end boutiques. Its president and chief executive, Jeffrey Lubell, owns 39 percent of the company.
"We believe a more diverse product offering, coupled with continued international expansion should help support both top and bottom-line growth," BB&T Capital Markets analyst Eric Tracy wrote in a client note. "The company's retail store also provides the potential for another growth vehicle longer term." BB&T also raised its earnings estimates on the company and affirmed its "Buy" rating on the stock.
Separately, analyst Eric Beder of Brean Murray Carret & Co. said a new True Religion store that opened in Manhattan Beach, Calif., in early December would help drive sales.
Demand for recently launched fleece items like $180 bottoms and $150 hoodie tops has been very strong, he said. "The company is embarking on the road to a diversified luxury brand, with the attendant high margins and potential for further strong top and bottom line upside," Brean Murray wrote. The brokerage also backed its "Strong Buy" rating on the company, with a $24 price target.
A third brokerage, Sterne, Agee & Leach, started coverage of True Religion with a "Buy" rating and $23 price target. |
