Benchmark Capital Cutting Estimates On Blue Nile (NILE)

Benchmark Capital is cutting its earnings estimates on Blue Nile NILE and lowering its price target to $30 from $35 after the online jewelry operator reported earnings estimates that fell short of expectations. It has a Sell rating on shares. In the report Benchmark Capital writes, "We lower our FY10 forecast, projecting net revenue may grow 9% y/y to $330 million ($347 million prior). Our EBITDA estimate falls by $3 million to $31 million, up 7% y/y, leading to a revised EPS estimate of $0.90, down from $1.00 prior. Free cash flow could reach $1.40 per share. Our 2011E EPS falls from $1.20 to $1.00. After hours, Blue Nile stock traded at $42 per share. Even at $42, Blue Nile trades at 42x our 2011E EPS of $1.00. Our ecommerce index trades at a group average of 22x. Leading Internet retailer Amazon (AMZN-Buy) trades at 39x. Using 30x 2011E EPS, we set a price target for Blue Nile of $30 per share and rate NILE a Sell." Shares of Blue Nile are getting crushed pre-market, down $5.69 to $41.85.