UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on Zumiez

In a report published Friday, J.P. Morgan & Co. reiterated its Overweight rating on Zumiez ZUMZ, but lowered its price target from $40.00 to $34.00. J.P. Morgan noted, “We believe that ZUMZ's weaker-than-expected August comp, combined with a worse-than-expected Blue Tomato impact pushed already skittish investors deeper into doubt as the company fights an uphill comp battle. At this point, investors need to gain comfort around ZUMZ's ability to return to +HSD comps and with a very strong August Week 4, 3Q12's comp guidance may well prove conservative, with management introducing a sufficiently low bar. Looking further out, we believe the Blue Tomato acquisition will continue to represent a complicated weight as the company and investors work through various one-time/accounting items. Although we recognize the growing concern, we remain OW as we believe a resurgence in BTS selling could act as a positive catalyst for shares.” Zumiez closed on Thursday at $32.22.