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 Breaking Headlines

Nautilus Not Making A Hit With Wall Street

OCTOBER 20, 2005 -- Nautilus has been getting some critical observations by Wall Street, including concern that lower consumer confidence and the hurricanes will put a damper on the company's results. Banc of America Securities initiated coverage of Nautilus with a neutral rating. RBC Capital Markets analyst Edward Aaron downgraded the company to sector perform from outperform, and dropped his price target to $23 from $31. Aaron said his caution is based on a weakening consumer and retail environment that likely signals a declining demand for fitness products this season. The analyst also reduced his 4Q estimate to 53¢, down from 57¢ a share. On average, analysts polled by Thomson Financial are expecting earnings of 57¢ per share on sales of $175.9 million.

"The recent hurricanes and resulting drop in consumer confidence were poorly timed, as they occurred immediately prior to the peak retail selling season (November through February) for fitness equipment," Aaron wrote in the research report. Nevertheless, he maintained a "positive long-term view" for the company and said he is inclined to revisit the rating once it becomes apparent that the company's earnings expectations are set at "an achievable level."

BB&T Capital Markets reiterated its buy rating on Nautilus, while reducing estimates for the company. The 12-month target price has been reduced from $35 to $30.


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Sporting goods industry
Earnings estimates
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Consumer confidence

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Nautilus
Banc of America Securities LLC
RBC Capital Markets
BB&T Inc.

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earnings expectations
reducing estimates
buy rating
lower consumer confidence

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