Michaels Companies (MIK) Downgraded by Zacks Investment Research

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Zacks Investment Research downgraded shares of Michaels Companies (NASDAQ:MIK) from a buy rating to a hold rating in a research report sent to investors on Tuesday morning.

According to Zacks, “Michaels has lagged the industry in the past three months backed by its dismal sales trend, which continued in second-quarter fiscal 2018. Notably, the company delivered negative sales surprise in 10 of the last 14 quarters. The soft sales performance is attributed to the closure of 94 full-size Aaron Brothers stores in the fiscal first quarter, which negatively impacted the second quarter, besides dismal comps. Further, the company continued to witness soft margins in the fiscal second quarter due to higher costs. Notably, this was the second straight quarter of gross margin decline, while operating margin remained soft for three consecutive quarters. However, the company’s store growth and omni-channel initiatives, along with a disciplined capital plan bode well. Further, the company has a robust earnings surprise history, having reported a beat in four of the last five quarters. The company also raised its earnings view for fiscal 2018.”

MIK has been the subject of a number of other reports. ValuEngine downgraded shares of Michaels Companies from a sell rating to a strong sell rating in a research note on Sunday, August 26th. Telsey Advisory Group dropped their target price on shares of Michaels Companies from $26.00 to $23.00 and set an outperform rating for the company in a research note on Friday, June 15th. JPMorgan Chase & Co. reaffirmed a focus list rating on shares of Michaels Companies in a research note on Thursday, June 21st. Wells Fargo & Co reaffirmed a hold rating and issued a $19.00 target price (down from $20.00) on shares of Michaels Companies in a research note on Thursday, August 30th. Finally, Deutsche Bank dropped their target price on shares of Michaels Companies from $21.00 to $19.00 and set a hold rating for the company in a research note on Friday, August 31st. Two investment analysts have rated the stock with a sell rating, seven have issued a hold rating, four have issued a buy rating and one has assigned a strong buy rating to the company. Michaels Companies presently has a consensus rating of Hold and a consensus price target of $22.78.

Shares of NASDAQ MIK opened at $16.03 on Tuesday. Michaels Companies has a 1-year low of $15.85 and a 1-year high of $27.87. The stock has a market capitalization of $2.74 billion, a price-to-earnings ratio of 7.39, a P/E/G ratio of 0.89 and a beta of 1.13. The company has a quick ratio of 0.60, a current ratio of 1.48 and a debt-to-equity ratio of -1.59.

Michaels Companies (NASDAQ:MIK) last announced its earnings results on Thursday, August 30th. The specialty retailer reported $0.15 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.13 by $0.02. Michaels Companies had a net margin of 6.31% and a negative return on equity of 24.56%. The company had revenue of $1.05 billion during the quarter, compared to the consensus estimate of $1.06 billion. During the same period in the previous year, the firm posted $0.19 earnings per share. The company’s revenue was down 1.8% on a year-over-year basis. equities research analysts anticipate that Michaels Companies will post 2.35 earnings per share for the current year.

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Brinker Capital Inc. raised its stake in shares of Michaels Companies by 12.8% during the first quarter. Brinker Capital Inc. now owns 25,374 shares of the specialty retailer’s stock worth $500,000 after buying an additional 2,879 shares during the last quarter. State Board of Administration of Florida Retirement System raised its stake in shares of Michaels Companies by 7.2% during the first quarter. State Board of Administration of Florida Retirement System now owns 52,994 shares of the specialty retailer’s stock worth $1,045,000 after buying an additional 3,543 shares during the last quarter. Mutual of America Capital Management LLC raised its stake in shares of Michaels Companies by 4.6% during the second quarter. Mutual of America Capital Management LLC now owns 95,902 shares of the specialty retailer’s stock worth $1,838,000 after buying an additional 4,180 shares during the last quarter. Pegasus Partners Ltd. raised its stake in shares of Michaels Companies by 1.9% during the second quarter. Pegasus Partners Ltd. now owns 228,832 shares of the specialty retailer’s stock worth $4,387,000 after buying an additional 4,191 shares during the last quarter. Finally, Dupont Capital Management Corp raised its stake in shares of Michaels Companies by 12.6% during the second quarter. Dupont Capital Management Corp now owns 37,704 shares of the specialty retailer’s stock worth $723,000 after buying an additional 4,209 shares during the last quarter.

About Michaels Companies

The Michaels Companies, Inc owns and operates arts and crafts specialty retail stores for Makers and do-it-yourself home decorators in North America. It operates Michaels stores that offer approximately 45,000 stock-keeping units (SKUs) in crafts, home decor and seasonal, framing, and paper crafting; and Aaron Brothers stores, which offer approximately 5,600 SKUs, including photo frames, a line of ready-made frames, art prints, framed art, art supplies, and custom framing services.

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