UPDATE: Telsey Downgrades JOANN Inc. (JOAN) to Market Perform

September 3, 2021 5:56 AM EDT
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Price: $8.00 +5.54%

Rating Summary:
    4 Buy, 4 Hold, 1 Sell

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Today's Overall Ratings:
    Up: 14 | Down: 24 | New: 13
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(Updated - September 3, 2021 6:24 AM EDT)

Telsey analyst Cristina Fernandez downgraded JOANN Inc. (NASDAQ: JOAN) from Outperform to Market Perform with a price target of $14 (from $18).

The analyst commented, "We are downgrading our rating on JOAN to Market Perform from Outperform due to limited visibility into the normalized demand level for arts & crafts, following a (29.9%) comp in 2Q21 that missed TAG/Street's forecast of (25%), and the impact of supply chain costs over the next several quarters. With ocean transport rates increasing in recent months, Joann is paying freight rates that are 4x the normal rate to bring inventory in on time for key selling periods. Supply chain costs are likely to remain elevated in 2022, given the company's inventory turns ~2x a year, likely putting pressure on 2022 profitability and EPS. We believe these two items may keep the stock range bound and prevent its valuation multiple from expanding in the near-term. Our new 12-month price target is $14, down from $18, and is based on applying a P/E multiple of ~6x to our new 2022 EPS estimate of $2.50, down from $2.73."

For an analyst ratings summary and ratings history on JOANN Inc. click here. For more ratings news on JOANN Inc. click here.

Shares of JOANN Inc. closed at $12.76 yesterday.

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