Michaels (NASDAQ:MIK) news for Monday concerning an analyst upgrade has MIK stock heading higher on Monday.
JPMorgan analyst Christopher Horvers is the source of the Michaels upgrade. The analyst upgraded MIK stock from its previous rating of “neutral” to a new rating of “overweight.” The reason behind the upgrade is analysts expecting sales growth from the company.
To go along with the new rating for MIK is a new price target. This has the JPM analyst pumping the price target up to $13 from the previous price of $7. That’s an 85.7% increase and is also 135.9% higher than the stock’s closing price of $5.51 per share when markets closed on Friday.
So why exactly are JPMorgan’ Christopher Horvers taking such a bullish stance on MIK stock? There are a couple of reasons. First off, the company’s business has been expanding since it acquired store locations and a distribution center from Nicole Crafts.
Another reason that the analyst has high hopes for Michaels has to do with the novel coronavirus pandemic. The company took this time to vastly upgrade its e-commerce platform. Despite a recent earnings miss, this could position it for strong growth in the future, reports MarketWatch.
Horvers said this about the Michaels news in a statement obtained by The Motley Fool.
“A path to positive comps over the next four quarters, new management, and improving margin performance into 2021 should drive a rerating of the shares.”
MIK stock was up 50.9% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.