Why Did BofA Upgrade Columbia Sportswear Stock?

A strong sell-through, helped by cold weather conditions in January and February, should support channel restocking and lend upside to Columbia Sportswear Company’s COLM Fall 2021 order book, according to BofA Securities.

The Columbia Sportswear Analyst: Alexander Perry upgraded the rating for Columbia Sportswear from Neutral to Buy, while raising the price target from $108 to $128.

The Columbia Sportswear Thesis: The company appears poised to benefit from “a stronger F21 recovery vs. our original expectations,” Perry said in the upgrade note.

“We believe COLM was better positioned compared to other brands and retailers for West Coast port congestion delays which are straining the global supply chain as COLM is able to use a great deal of inventory on hand for its Spring/Summer ’21 shipments …. Our analysis suggests the West Coast port delays are improving,” he added.

Columbia Sportswear is witnessing an acceleration in e-commerce momentum, the analyst noted. Columbia Brand’s web traffic has surged by 37% quarter to date, versus 15% growth in the fiscal fourth quarter, he noted. Moreover, Sorel’s web traffic is up 77% quarter to date, versus 17% growth in the fiscal fourth quarter. Sorel is a footwear division of Columbia Sportswear.

COLM Price Action: Shares of Columbia Sportswear had risen by 3.75% to $111.36 at the time of publication Monday.

Related Link: What's going on today with trading? Check-in with Neal Hamilton on Benzinga's "Get Technical" on YouTube.

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