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Wachovia raised its investment recommendation on Volcom (VLCM
) to outperform from market perform.
Analyst Joseph Teklits said he believes Volcom is well positioned to benefit from the growing popularity of action sports, the fusion of active and fashion wear, and the globalization of brands. He said that while overall fall selling season may be off to mixed start, his channel checks with core board and specialty stores indicate the business remains extremely strong. He notes that in the company's latest 10-Q filing, backlog was reported to be up 42%; this, along with his channel checks lead him to believe his second half 2005 sales estimates (up 25% to 30%) could prove to be conservative. The analyst sees 85 cents 2005 earnings per share and $1.00 earnings per share in 2006.