The firm said it raised its rating on the outdoor apparel, footwear, accessories, and equipment designer, marketer, and distributor, based on its "proprietary outwear survey, positive industry commentary, and likely better traffic trends at key outwear channels."
"Columbia has appreciated +18% since mid-October, but only +6% year-to-date. With operating margins likely up significantly this year to [around] 9.5%, we think management is on the path to returning to mid-teens operating margins, which has not been achieved since 2005," Citigroup said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The firm said it raised its price target on Columbia Sportswear stock to $48 from $42.
Shares of Columbia Sportswear are higher by 4.39% to $43.48 in pre-market trading this morning.
Separately, TheStreet Ratings team rates COLUMBIA SPORTSWEAR CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COLUMBIA SPORTSWEAR CO (COLM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.6%. Since the same quarter one year prior, revenues rose by 27.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COLM's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, COLM has a quick ratio of 1.69, which demonstrates the ability of the company to cover short-term liquidity needs.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 45.60% is the gross profit margin for COLUMBIA SPORTSWEAR CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.68% trails the industry average.
- You can view the full analysis from the report here: COLM Ratings Report