True Religion Apparel Inc. rose more than 13 percent Monday after an analyst upgraded shares, asserting that the company's premium denim sales are likely to remain strong despite the weak economy.
Eric Tracy at BB & T; Capital Markets raised his recommendation on the trendy Vernon clothing maker to "buy" from "hold." Despite overall declining sales at the upscale retailers like Nordstrom and Nieman Marcus, True Religion sales within those stores remain strong. The company's shares also had fallen 34 percent since Oct. 1, making the stock a good buy.
"We believe that although the economic headwinds have taken a toll on consumer discretionary spending, the premium denim category has continued to thrive, appealing to status-driven customers, who while not immune, are less susceptible to the economic slowdown," Tracy said in a note to investors. He has a $25 price target on shares.
True Religion shares closed up $2.30, or 13.6 percent, to $19.20 in trading on the Nasdaq.
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