Goldman Sachs raises its rating on 1-800-Flowers Inc.

Long Island Business News, Jul 11, 2006 by Gregory Zeller

The bloom is back on the rose at 1-800-Flowers Inc.

Global investment banking and securities firm Goldman Sachs on Tuesday raised its rating on the gift retailer from sell to neutral. Among other factors, Goldman Sachs noted 1-800-Flower's stock was within 6 percent of Goldman Sach's six-month price target of $6 per share.

The stock's decline of 21 percent [since Goldman Sachs downgraded 1-800-Flower's rating last year] is the sole reason for our upgrade, states a Goldman Sachs Group Inc. research ntoe obtained by LIBN. We believe that recent weakness in - shares is partly attributable to the reduction in profit forecasts over the past several weeks.

While we remain concerned about the challenge that (the company) continues to face in driving double-digit top-line growth without sacrificing profitability - we believe that the current share price more than discounts this risk, the note adds.

Almost a year ago to the day, on July 12, 2005, Goldman Sachs downgraded 1-800-Flowers stock from in-line to underperform.

Despite that setback, Tuesday's upgrade marks the fourth straight ratings hike for the Carle Place company's stock. WR Hambrecht (Aug. 10, 2005, from sell to hold), Keybanc Capital Markets (Sept. 19, 2005, from buy to aggressive buy) and Brean Murray (Dec. 8, 2005, from accumulate to strong buy) have all upgraded 1-800-Flowers' rating within the past year.

After closing Monday at $5.63 per share, 1-800-Flowers stock [Nasdaq: FLWS] was up 27 cents, nearly 5 percent, to $5.90 per share late Tuesday afternoon.