Piper Jaffray reiterates Blue Nile (NILE ) at market perform. He says fourth-quarter results may not sparkle.
Analyst Aaron M. Kessler says he's taking a cautious stance prior to the release of fourth-quarter results after the market closes on Tuesday.
His caution reflects his forecast for an in-line fourth quarter and conservative forward guidance, combined with negative reactions he's seen thus far in the eCommerce stocks that didn't exceed consensus estimates (eBay, Amazon, and Shopping.com).
Also concerning him are increasing competition on low- to mid-end market and rising online advertising costs.
Kessler believes the shares are fully valued at current levels, with shares trading at 38 times his 70 cents 2005 earnings per share estimate. He keeps his $32 target.