JOAN - JOANN drops after Bank of America downgrades due to slowing demand trends

Bank of America downgraded JOANN ( NASDAQ: JOAN ) to an Underperform rating after having the retailer set at Neutral.

The firm warned that recent data suggested that arts & crafts demand is slowing with the COVID tailwind faded and tough competition was noted in the category. Analyst Elizabeth Suzuki thinks margin headwinds are likely to persist for JOANN.

"Given lack of store growth and modest comps, it is appropriate for JOANN to trade more in-line with value retailers in our hardline universe, and at a discount to growth retailers, in our view. In the medium term, EBITDA is hampered by cost inflation and sluggish demand."

BofA assigned a price objective of $8 to JOAN.

Shares of JOAN fell 2.89% premarket on Wednesday to $7.72.

The Seeking Alpha Quant Rating on JOAN is flashing Sell.

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