NEW YORK (AP) -- A Baird analyst downgraded retailer Quiksilver Inc. on Friday after a recent rally sparked by the company naming a new CEO earlier this month.
THE SPARK: Mitch Kummetz cut Quiksilver to "Neutral" from "Outperform."
THE BIG PICTURE: Quiksilver shares have risen 45 percent since the surf-and-skate clothing and shoe company announced the resignation of CEO Bob McKnight and tapped Andy Mooney to fill the post.
McKnight is the founder of Quiksilver and will now serve as its executive chairman. Mooney has worked at The Walt Disney Co. and Nike Inc.
Sales of Quiksilver, which owns Roxy, DC and its namesake brand, dropped during the recession and have yet to recover from their level prior to the downturn. The company has made several changes to revitalize its business, such as increasing marketing, while cutting jobs and expenses to save money.
THE ANALYSIS: Kummetz said Friday that he is confident in Mooney's abilities and positive about Quiksilver's business over the long term, noting continuing momentum in the brands. But he said the critical holiday shopping season was not great for action sports retailers, and the shares have risen too fast given the company's near-term outlook.
SHARE ACTION: The stock reached a new four-year high of $6.68 on Tuesday. Shares dropped 20 cents, or 3 percent, to $6.35 in afternoon trading.
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