Shares of Elizabeth Arden Inc. rose on Thursday, after an analyst said investors could be too skeptical about the company's fragrance licensing deal with Liz Claiborne Inc.
Late last month, the cosmetics and fragrance maker said it would make and distribute Liz Claiborne fragrances for its brands, including Juicy Couture, Usher and Lucky Brand.
The deal became effective on Tuesday.
Jason Gere, a Wachovia Capital Markets analyst who upgraded Elizabeth Arden to "Outperform," on May 29 based on the deal, said investors seem to be showing skepticism about how much it will help earnings, particularly because the company hasn't given detailed financial guidance on the agreement.
Shares spiked 18 percent on May 29 on news of the deal and upgrade, but since then, shares have fallen 8 percent. But on Thursday, shares gained another 31 cents, or 2.1 percent, to $14.91.
Gere said that there is some risk to the company's core business in a difficult U.S. economic environment, but added "we still believe that there is upside in the Liz deal which should more than offset potential downside in core business."
He reiterated his "Outperform" rating on the stock.
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