AG Edwards Upgrades Callway to Hold

Analyst Timothy Conder sees significant improvement in retail channel inventories for the golf-equipment maker

AG Edwards upgrades gold-equipment maker Callaway Golf (ELY ) to hold from sell.

Analyst Timothy Conder says his upgrade is premised on significant improvement in Callaway's retail channel inventories following July price reductions, its ability to hold prices on new 2005 products, and limited downside (to $8 to $9 area).

Conder fine-tunes his 2004 earnings-per-share estimate to 44 cents on $940.2 million in revenue. He raises his 64 cents 2005 earnings-per-share estimate to 74 cents on revenue of $968.2 million. He says his 2005 estimate is dependent on consumer acceptance of new products and their competitors response, which he doesn't expect clarity on until the Spring of 2005.