UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Children's Place Retail Stores on Improving Outlook

In a report published Thursday, J.P. Morgan analyst Brian J. Tunick reiterated a Neutral rating on

, and raised the price target from $48.00 to $54.00. In the report, J.P. Morgan noted, “After several years of distractions (Disney, proxy fight), and a new CEO, the PLCE story has become much cleaner, with operating margin recovery opportunity potentially driving earnings growth to over $5 over the next few years. While we continue to like PLCE's margin recovery story with operating margins having upside to ~10% in the next few years from 5.7% in FY12, at current levels we think risk/reward looks pretty even. With a new CFO and several company specific sales and margins drivers ahead, investors are willing to look ahead to the improving gross margins at factory outlet, the growing penetration of e-com, the opportunity to fix Canada (where margins have fallen 1000bps in the past three years) and the ongoing sourcing story to reduce China exposure. We also expect to hear more about potential store closings/fleet rationalization to drive sales productivity. Finally, last year's wholesale test with Sam's Club was viewed as a success and we believe the company will explore more potential wholesale distribution deals in the future.” Children's Place Retail Stores closed on Wednesday at $53.81.