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KeyBanc Rated Columbia Sportswear Company as ‘Sector Weight’

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Price movement

Columbia Sportswear (COLM) has a market cap of $4.1 billion. It rose 0.42% to close at $57.81 per share on September 22, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 6.8%, 1.1%, and 19.6%, respectively, on the same day.

COLM is trading 3.6% above its 20-day moving average, 1.7% above its 50-day moving average, and 4.6% above its 200-day moving average.

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Related ETF and peers

The Guggenheim Mid-Cap Core ETF (CZA) invests 0.46% of its holdings in Columbia Sportswear. The ETF tracks the Zacks Mid-Cap Core Index, a proprietary selected portfolio of 100 mid-cap stocks that seeks to outperform pure market-cap indexes. The YTD price movement of CZA was 11.4% on September 22.

The market caps of Columbia Sportswear’s competitors are as follows:

  • Nike (NKE) — $93.5 billion
  • Under Armour (UA) — $16.2 billion
  • Skechers USA (SKX) — $3.5 billion

COLM’s rating

KeyBanc has initiated the coverage of Columbia Sportswear Company with a “sector weight” rating.

On September 20, 2016, Canaccord Genuity upgraded Columbia Sportswear’s rating to a “buy” from a “hold” and set the stock’s price target at $72 per share.

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Performance of Columbia Sportswear in 2Q16

Columbia Sportswear (COLM) reported 2Q16 net sales of $388.7 million, a rise of 2.2% compared to net sales of $380.2 million in 2Q15. Sales of Columbia and prAna brands rose 2.6% and 23.4%, respectively. Sales of Sorel and Mountain Hardwear fell 18.6% and 19.8%, respectively, in 2Q16 compared to 2Q15. The company’s gross profit margin rose 2.6% in 2Q16 compared to the prior year’s period.

COLM’s net income and EPS (earnings per share) fell to -$8.2 million and -$0.12, respectively, in 2Q16 compared to -$6.5 million and -$0.09, respectively, in 2Q15.

COLM’s cash and cash equivalents and inventories rose 12.1% and 12.5%, respectively, in 2Q16 compared to 2Q15. Its current ratio rose to 3.3x, and its debt-to-equity ratio fell to 0.33x in 2Q16 compared to a current ratio and debt-to-equity ratio of 3.2x and 0.35x, respectively, in 2Q15.

Projections

Columbia Sportswear (COLM) has made the following projections for fiscal 2016:

  • net sales growth in the mid-single-digits, which includes a negative effect of ~1% from changes in currency exchange rates
  • operating income of $254 million–$263 million
  • net income of $184 million–$191 million
  • EPS of $2.60–$2.70, which includes the unfavorable impact of -$0.26 from the strong US dollar
  • tax rate of ~25%

Next, we’ll take a look at International Paper Company (IP).

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