Coldwater Creek shares rise after analyst upgrade

Shares rose 34 cents, or 6.1 percent, to $5.95 during morning trading. The stock has traded between $3.40 and $24.09 during the past 52 weeks and has fallen 16 percent since the beginning of the year.

C.L. King & Associates analyst Mark Montagna said in a note to investors Thursday he believes the company is working on improving merchandise assortments and reducing inventory levels.

Women's apparel retailers such as Coldwater Creek have been among the hardest hit as consumers cut back spending amid a rising cost of living and declining home values, partly because of a lack of new trends or differentiated merchandise in the sector.

However, Montagna said this is likely to change at Sandpoint, Idaho-based Coldwater Creek, particularly with its fall lineup, and recommended investors buy shares ahead of the company's investor event July 14-15.

"We expect investors to walk away favorably impressed with management commentary regarding its execution plans," he wrote. "Most importantly, we anticipate investors will be favorably impressed with a preview of the Fall 2008 merchandise."

He upgraded the company to "Strong Buy" from "Accumulate."