Blue Nile slips as analyst lowers price target

Shares of online jewelry company Blue Nile Inc. dipped on Monday after an analyst trimmed his price target on the stock and said consumer spending in the U.S. has softened.

Many consumers have been cutting back on spending recently as gas prices continue to climb and the U.S. economy continues to show signs of weakness.

Stifel Nicolaus & Co. analyst Scott W. Devitt, who rates the stock "Buy," lowered his price target to $52 from $54, which still implies upside of 29.4 percent to Friday's closing price of $40.20.

Devitt also expects 7.7 percent sales growth in 2008, down from his prior estimate of 9.7 percent.

Aside from consumer spending concerns, Devitt said Blue Nile has expanded meaningfully abroad and generates good free cash flow.

Blue Nile is slated to report its second-quarter results on Aug. 5.

Shares slipped 59 cents, or 1.5 percent, to close at $39.61 Monday, after trading down as much as 2.7 percent at $39.10 earlier in the session.