UPDATE: Topeka Capital Markets Initiates Pacific Sunwear of California with Hold on Brand Portfolio Evolution

In a report published Thursday, Topeka Capital Markets analyst Dorothy S. Lakner initiated coverage on Pacific Sunwear of California (NASDAQ: PSUN) with a Hold rating and $2.50 price target.In the report, Lakner noted, “We like the evolution of PSUN's brand portfolio which seeks to make PacSun stores once again a destination for teens and the fact that its fleet downsizing is winding down. PSUN does seem headed in the right direction: its assortments and brands seem to be resonating better with customers and with tight inventory control and a pared down store base, gross margin should continue to improve, especially if comp gains accelerate. PSUN has also done a good job controlling its expenses in a tough environment. If it can get the topline really going, it could work its way back to profitability, perhaps even next year—though for now, we'd prefer to err on the side of conservatism.”Pacific Sunwear of California closed on Wednesday at $2.42.