UPDATE: Canaccord Genuity Upgrades Finish Line (FINL) to Buy

Canaccord Genuity upgraded Finish Line (NASDAQ: FINL) from Hold to Buy with a price target of $33.00. Analyst Camilo Lyon expects margin recovery to improve faster than anticipated as issues related to recent markdowns are resolved.

"Last year was fraught with margin-degrading markdowns from 1) RSG inventory clearance in 1Q/4Q, 2) basketball markdowns in 2Q/3Q, and 3) running markdowns in 3Q/4Q. These drags should all reverse this year, creating margin upside relative to consensus estimates," said Lyon.

The analyst added, "In addition, FINL should benefit from an improved assortment of running product that more closely matches current casual demand trends as well as an increased allocation of key basketball styles (e.g. Air Force 1). Lastly, the company's efforts to improve the profitability of Macy's coupled with a tightly managed expense structure should add to our earnings re-acceleration thesis. Given the multiple margin levers in place, we believe there is meaningful upside to current guidance of L-MSD EPS growth in 2015, and thus are raising our 2015 estimates to $1.88 from $1.74 and our price target to $33 from $26."

For an analyst ratings summary and ratings history on Finish Line click here. For more ratings news on Finish Line click here.

Shares of Finish Line closed at $26.44 yesterday.

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