UPDATE: JP Morgan Downgrades Valassis Communications to Neutral on Limited Upside

JP Morgan reduced its rating on Valassis Communications VCI from Overweight to Neutral while reiterating its previous $30 price target. JP Morgan noted, "We are downgrading shares of VCI to Neutral from Overweight following strong outperformance YTD and this quarter (up 41% YTD and 10% QTD vs. S&P +15% YTD and -1% QTD). We continue to find valuation attractive at 8x our 2013 EPS and a 16% FCF yield, and believe its recently introduced dividend—yielding 4.6%—provides a good base to the stock while supplementing a healthy buyback. However, with the company's favorable capital allocation now established and 2013 earnings guidance set for modest EBITDA growth, we believe shares lack a near-term catalyst." Valassis Communications closed at $27.18 on Thursday.