UPDATE: J.P. Morgan Downgrades National CineMedia to Neutral, Reiterates $20 PT on Valuation

In a report published Wednesday, J.P. Morgan analyst Townsend Buckles downgraded the rating on

from Overweight to Neutral, but reiterated the $20.00 price target. In the report, J.P. Morgan noted, “We are lowering our rating on NCMI to Neutral from Overweight based on valuation. With shares up 43% YTD – nicely outperforming the S&P, up 25% – the stock is approaching our year-end 2014 price target of $20. We continue to find the NCMI outlook very attractive as a long-term advertising share gainer with strong FCF from high profit margins and low capex that supports a healthy dividend, currently yielding 4.5%. However, now at 12.5x our 2014 adj. EBITDA and 30x EPS – at the higher end of our media universe – we view shares as fairly valued for the medium term.” National CineMedia closed on Tuesday at $19.44.