UPDATE: ISI Group Downgrades Munro Muffler Brake to Neutral on Trimmed Estimates

In a report published Tuesday, ISI Group analyst Michael Montani downgraded the rating on

from Buy to Neutral. In the report, ISI Group noted, “We are downgrading MNRO from Buy to Neutral to reflect moderation in vendor order volumes and lingering Northeast/Midwest weakness in our proprietary surveys. We like Monro's long term unit growth potential, but moderation in our survey work suggests comps likely continue to languish. We are lowering our comps by 100bps, taking FY15 EPS from $2.10 to $2.00, and the Base Case from $49 to $46 (23x our updated $2.00 FY15 EPS). We are taking profits with the stock up 19% since our 2/10 upgrade (vs. the S&P 12%), and short interest down 40% removing one of the key catalysts. Valuation reflects much of the good news with MNRO's absolute P/E of 24.5x at a 25% premium to its historic 5yr average, and a 65% premium to the S&P vs. 50% historic norm.” Monro Muffler Brake closed on Monday at $43.99.