MKM Still Rates Blue Nile Buy Despite Weak Q2 (NILE)

MKM Partners reiterated a Buy rating for Blue Nile NILE. MKM analysts said, "We acknowledge that recommending NILE ahead of 2Q10 earnings was the wrong call, as we expect corrective price action today. We did not fully appreciate the effect of May’s market volatility spike, which led to deterioration in consumer sentiment and ultimately a decline in retail jewelry demand in June. Now, the good news: Business conditions have improved significantly since early July, suggesting that June was an anomaly. In other words, NILE’s disappointing 2Q10 results appear to have been caused by temporary consumer paralysis – not a structural issue with the model. Our thesis, therefore, is unchanged." MKM lowered their price target to $57 to $60.