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Wells Fargo Reaffirms Their Hold Rating on Michaels Companies


In a report released today, Zachary Fadem from Wells Fargo maintained a Hold rating on Michaels Companies (NASDAQ: MIK), with a price target of $20. The company’s shares opened today at $18.86, close to its 52-week low of $17.25.

Fadem wrote:

“We launched coverage of MIK on 4/23 (Slime Is and we believe today’s update supports our cautious view on 2018. We believe the category is low growth and highly discretionary, with potential for margin degradation as competition elevates (61% of Hobby Lobby openings YTD are within 5mi of MIK) and considerable reinvestment remains (stores, digital, etc.). Absent better-than-expected performance in 2H18, we see few near-term catalysts with long-term concerns around margin compression, a more challenging narrative on competition (both AMZN and brick/mortar peers) and 3x leverage in a rising rate environment. Reiterate Market Perform.”

According to TipRanks.com, Fadem is a 4-star analyst with an average return of 8.2% and a 64.9% success rate. Fadem covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Floor & Decor Holdings Inc, and Advance Auto Parts.

Michaels Companies has an analyst consensus of Moderate Buy, with a price target consensus of $22.75.

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Based on Michaels Companies’ latest earnings release for the quarter ending January 31, the company reported a quarterly net profit of $202 million. In comparison, last year the company had a net profit of $71.87 million.

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Michaels Cos., Inc. is an arts and crafts specialty retailer, which engages in the provision of materials, project ideas, and education for creative activities. It operates through the following segments: Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s, and Darice.