From Standard & Poor's Equity Research

Piper Jaffray upgraded Blue Nile (NILE) to market perform from underperform, noting a solid second quarter.

Analyst Aaron Kessler says the company's strategy of lower prices appears to be working, as it was able to increase its revenue growth while keeping marketing spending under control. He notes that the company increased its revenue and earnings per share (EPS) guidance. He raises his $21.1 million 2006 earnings before interest taxes depreciation and amortization (EBITDA) estimate to $21.5 million, his $241 million revenue estimate to $253 million, his $25.6 million 2007 EBITDA estimate to $27.1 million, and his $280 million revenue estimate to $302 million. He raises his $25 stock price target to $29.

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