Scotia Capital upgraded diamond producer Harry Winston (NYSE:HWD) from "Sector Perform" to "Sector Outperform," after the company blasted through analysts' expectations for the last quarter.
The question is whether they can continue that performance going forward, and that's going to be a big challenge for the company.
The broader diamond market has rebounded, to help Harry to their decent numbers, and they also bought back the stake held by Kinross Gold (NYSE:KGC), which brought their stake in the Diavik mine back to 40 percent, with the remainder held by Rio Tinto (NYSE:RTP).
Compared to their major competitors, they aren't near as efficient with operational costs, and retail isn't nearly as strong as it could be.
Those would have to be improved to make Harry Winston more convincing over the long term.