Ahead Of The Bell: Blue Nile Downgraded

NEW YORK (AP) — Shares of Blue Nile Inc., an online jewelry retailer, were downgraded by a Citi Investment analyst due to a recent runnup in its share price.

Since the beginning of the year, Seattle-based Blue Nile's share price has more than doubled, closing at $59.11 on Friday

Last month, Blue Nile said second-quarter profit fell 11 percent as sales declined 5 percent, although it said sales declines are moderating. Blue Nile also revamped its web site earlier this month.

However, since the runup in share price, analyst Mark S. Mahaney said the stock's ratio of risk to reward is "less compelling."

"We continue to view Blue Nile as a core Internet holding and believe the recent share price surge is well justified, but would prefer an entry (or) adding price below $50."

He downgraded the company to "Hold" from "Buy" but kept his $62 price target on the stock.