Michaels downgraded on fears of continues sales declines

Michaels Cos. Inc. slid 3.2% in Friday premarket trading after it was downgraded to neutral from outperform at Credit Suisse on concerns that sales will continue to be weak and uncertainty about management changes and long-term strategy. Credit Suisse cut its price target to $11 from $18. Michaels reported a fiscal first-quarter revenue miss, which sent shares down 12.4% on Thursday. Wells Fargo also cut its price target to $8 from $14, but maintained its market perform stock rating. Analysts there give interim Chief Executive Mark Cosby credit for moving quickly to adjust pricing, merchandising and customer communications. But they "remain more cautious, as the category remains challenged, competition is growing, and these initiatives likely take time to meaningfully improve results," analysts wrote. Michaels stock has sunk 39.6% for the year to date while the S&P 500 index has gained 13.4% for the period.

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