Bank of America downgrades Columbia Sportswear, citing factory closures in Vietnam
Columbia Sportswear could be one of the stocks that is held back by the supply chain issues caused by Covid in Asia, according to Bank of America. Analyst Alexander Perry downgraded Columbia to neutral from buy, saying Tuesday in a note to clients that factory closures in Vietnam were going to hurt the business through next year. "Importantly, we expect COLM's faster growing footwear segment to have an outsized impact from factory closures, especially as COLM was already limited by production capacity constraints," the note said. Columbia's holiday sales numbers could be solid because of early shipping, but production delays have likely gotten worse since the company's last earnings report in August, Bank of America said. Shares of Columbia have slipped 5% over the past three months, and Bank of America doesn't see a big rebound. The firm lowered its price target on Columbia to $108 per share, down from $137 per share, which is about 10% above where the stock closed Monday. The long-term outlook for Columbia still has positives, but the company will likely struggle next year, Bank of America said. "While we see a longer term benefit from potential market share gains from larger athletic brands such as Nike & Under Armour consolidating wholesale distribution, we now see more limited opportunity in 2022 given supply chain constraints," the note said. —CNBC's Michael Bloom contributed to this report.
A Columbia Sportswear Company sign hangs in front of their store at the Woodbury Common Premium Outlets shopping mall on November 17, 2019 in Central Valley, New York.
Gary Hershorn | Corbis | Getty Images
Columbia Sportswear could be one of the stocks that is held back by the supply chain issues caused by Covid in Asia, according to Bank of America.