Demandware up after Janney initiates at Buy
Shares of Demandware Inc., which helps companies set up online stores, climbed Wednesday after Janney Capital Markets initiated coverage with a "Buy" rating.
THE SPARK: Analysts Shawn Milne and Michael Carroll picked up coverage of the Burlington, Mass., company, saying it will benefit from the long-term trend of shopping moving online.
They put a price target of $35 on the shares, which suggests a gain of 21 percent from Tuesday's close of $28.97.
THE ANALYSIS: The analysts said the increasingly sophisticated online shopping environment is driving retailers to increase spending on their systems and speed up revamps of their online stores. Milne and Carroll expect Demandwares revenue to grow 30 to 40 percent per year over the next two to three years. He also thinks the company's margins should improve next year as big investments in the sales force are behind it.
Margins are how much of revenue a company keeps as profit after costs.
SHARE ACTION: Demandwares shares rose $2.86, or 9.9 percent, to $31.83 in afternoon trading. The shares are close to their all-time high of $31.98. The company went public in March at $16 per share.