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Goldman Sachs Downgrades Columbia Sportswear to ‘Neutral’

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Goldman Sachs downgrades Columbia Sportswear

Portland-based Columbia Sportswear (COLM) is covered by 18 Wall Street analysts. The company is rated a 2.2 on a scale of 1 for “strong buy” to 5 for “sell.”

COLM was downgraded by Goldman Sachs from a “buy” to a “neutral” rating on December 12, 2017. Analyst Lindsay Drucker Mann lowered the company’s rating, citing valuation concerns.

Mann said the company has a balanced risk-reward profile at the current share price. Its stock price (after the recent rally) reflects the company’s fundamental improvements. Mann left the price target unchanged at $78. The target reflects an 11% upside to its December 15, 2017, price.

Share price movement

COLM is currently trading at $70.11 as of December 15, 2017, which is close to its 52-week high. The company has risen 20.3% YTD (year-to-date). The stock has rallied 10% in the last month, primarily due to a generally positive sentiment for retail stocks following better-than-expected results and solid Black Friday and cyber Monday sales for several retailers.

The seven-company S&P 500 Apparel and Accessories Index has risen 17% YTD compared to 19.5% YTD gains for the S&P 500 Index (SPX-INDEX). However, over the past month, the Apparel and Accessories Index has risen ~9% compared to a 4.3% rise in the S&P 500 Index.

Wall Street recommendations and target price

About 44% of Wall Street analysts covering Columbia Sportswear stock have rated it a “buy.” Those analysts include Wedbush, Pivotal Research, and Guggenheim. There are no “sell” ratings for the company. Stifel, Buckingham Research, and Canaccord Genuity are among the brokers who have a “hold” recommendation for COLM.

Wall Street has set an average price target of $68.25 for COLM. That reflects a downside of 3% over its current share price. Individual target prices range from $58 (17% downside) to $78 (11% upside).

ETF investors seeking to add exposure to COLM can consider the iShares Morningstar Small-Cap Growth (JKK), which invests ~0.3% of its portfolio in the company.

In the next part, we’ll look at recent analysts’ actions for Under Armour.

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