By The Associated Press
Shares of Signet Jewelers Ltd. jumped in trading Thursday after a Citi analyst initiated coverage of the retailer with a buy rating.
THE SPARK: Citi Research analyst Oliver Chen initiated coverage of the jeweler with a buy rating and $60 target price.
The analyst said he expects Signet's market share to continue to grow given its national advertising and broad recognition of its chains, Kay Jewelers and Jared The Galleria of Jewelry.
Signet, in Chen's view, has capabilities that cannot be replicated by other companies. This includes a strong in-house credit system, unique inventory management system and proprietary brands of jewelry available only its stores.
THE BIG PICTURE: Signet is the largest specialty retail jeweler by market share in a highly fragmented market, according to Chen. The company is followed by high-end jeweler Tiffany & Co.
Signet reported in August that stronger sales online and in its Kay stores drove its second-quarter profit up 7 percent to beat market expectations.
SHARE ACTION: Shares rose $1.39, or 2.9 percent, to $49.69 in midday trading after rising as high as $50.14 earlier in the session. Its shares are trading near its 52-week high of $51.44.
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