ULTA - Ulta Beauty jumps to JPMorgan's Analyst Focus List; BJ's and Michaels drop off

JPMorgan does some ratings shuffling in the coverage of the broadlines and hardlines retail sector. The firm removes BJ's Wholesale Club (BJ) and Michaels (MIK) from its closely-watched Analyst Focus List and downgrades both stocks to Neutral from Overweight. Analyst Christopher Horvers: "First, both names are up strongly YTD (and since we added them to the AFL). Second, they are COVID winners that are likely to see trend deceleration in December/January on earlier holiday sales (also when the COVID case surge ebbs in the case of BJ) and then 2021 guidance will loom as we approach 4Q earnings. Third, these stocks likely see greater headwinds given their mid-cap status and underlying skepticism from certain investors whether 'anything has really changed' besides being COVID beneficiaries. Fourth, MIK's balance sheet also remains highly levered, which weighs on its P/E multiple." The price target on BJ's is cut to $41 and the PT

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Ulta Beauty jumps to JPMorgan's Analyst Focus List; BJ's and Michaels drop off