Dixie "buy," estimates reduced

07/18/06 - Stifel Nicolaus

NEW YORK, July 18 (newratings.com) - Analysts at Stifel Nicolaus & Company reiterate their "buy" rating on Dixie Group Inc (DXYN), while reducing their estimates for the company. The target price is set to $18.

In a research note published this morning, the analysts mention that the company is likely to raise carpet prices to offset the rise in fiber prices. Although Dixie’s performance has not been significantly affected by these price hikes on account of the types of nylon fibers that it purchases, some negative impact is likely to be reported in 3Q, the analysts say. The EPS estimates for 2006 and 2007 have been reduced from $1.00 to $0.96 and from $1.45 to $1.40, respectively.