) to market perform from strong buy.
Analyst Budd Bugatch says his downgrade comes on the heels of the stock's recent upward climb, with shares up about 35% since Jan. 1, vs. a market move of 15%. He notes his only reservation about downgrading now is that the company is at the headwaters of a stream of improving sales and earnings.
Bugatch says in the second quarter, the furniture maker's sales advanced by 11%, management's best-case guidance for third-quarter sales growth is 6%, and earnings per share guidance is 55 cents to 57 cents. He notes his third-quarter estimates are higher than guidance, projecting an 8% sales gain, and 60 cents earnings per share.
But Bugatch notes the shares are very near his previous $33 target.