Helen Of Troy Rises As Analyst Upgrades To 'Buy'

NEW YORK (AP) — Shares of Helen of Troy Ltd. advanced Wednesday after an analyst upgraded the personal care products company and said commodity costs are easing, which should boost earnings.

The stock rose 87 cents, or 5.4 percent, to $16.38 in morning trading. The stock has ranged from $8.55 to $24.70 over the past year.

Wedbush Morgan Securities analyst Rommel T. Dionisio raised his rating to "Buy" from "Hold," predicting earnings will improve in fiscal 2010 because of lower prices for raw materials.

Dionisio said gross margins in the first quarter of 2010 should be the first full quarter to reflect a sharp drop in spot prices for plastic resin.

Spot prices for plastic resin declined 60 percent between September and November last year and have remained stable ever since, Dionisio said.

"With most of Helen of Troy's products produced from plastic resin, we expect gross margins to see benefit by the first quarter of 2010 and beyond," Dionisio wrote in a client note.

Dionisio also expects orders from major customers to normalize once retailers finish destocking their inventory.

Dionisio raised her price target by $5 to $18, implying shares have room to rise 15.8 percent from Tuesday's closing price of $15.54.