True Religion shares rise following analyst's upgrade

True Religion's shares are down about 17 percent over the past two weeks but nothing fundamentally has changed, said Morgan Keegan analyst Brad Stephens.

"Retailers are still saying that denim's bucking the trend and we believe True Religion is one of a handful of winners," Stephens wrote in a client note Thursday.

While investors could be worrying about the fact that the company has until Wednesday to report fourth-quarter earnings or face delisting, as well as other factors, there is no material weakness that caused the stock to drop, Stephens said.

He expects the company to detail some "moving parts" in the first quarter when it reports on Tuesday, including a management compensation expense, which could lead to a "relief rally" in the shares.

Shares rose 94 cents, or 5.9 percent, to $16.85 during midday trading. The stock has traded between $13.89 and $23.74 during the past 52 weeks.