UPDATE: J.P. Morgan Initiates Coverage on Express

According to a research report published this morning, J.P. Morgan has initiated Express EXPR with a Neutral rating and $20 PT. J.P. Morgan commented in the report, "We recognize that the recent sell-off may well prove a compelling entry point for a strong business with several earnings drivers; however, at present we choose to remain sidelined as we await greater clarity on the reversal in top-line trends following the 1Q12 missed sales opportunities in the women's knit-tops category. We will continue to monitor trends at the store levels and look to consider getting more constructive on shares as we get comfortable with ongoing comp improvements. However, at present, with no real catalysts in the near term, we believe investors may look elsewhere for 2H12 plays as 1) EXPR does not stand to recapture material gross margin in 2H12 relative to other retailers and 2) with roughly flat traffic, EXPR has been driving store comps off of AUR increases, a metric that should reverse in 2H12." Express closed yesterday at $17.86.