UPDATE: Deutsche Bank Downgrades Finish Line to Hold, Lowers PT

In a report published Friday, Deutsche Bank downgraded its rating on Finish Line FINL from Buy to Hold, and lowered its price target from $25.00 to $20.00. Deutsche Bank noted, “We are downgrading shares of Finish Line to Hold from Buy as shares now represent fair value in our opinion as top-line and earnings growth appear to be subdued near-term. While the 3Q website issues may have been 1x in nature and the company is now appropriately reducing inventory and expense levels, we see no near-term catalysts to propel shares higher as (1) it may take a few quarters to alter the company's merchandise mix toward basketball footwear, (2) significant investments still remain ahead including new systems, store remodels, and an improved website, and (3) reduced capital expenditures may not necessarily translate into a return of cash to shareholders as the Macy's store rollout begins in April 2013. We believe FINL is on the road to returning to profitable growth, however, it is unlikely to be the mid teen rate the company previously forecasted, without the sales trends improving. We have cut our EPS view meaningfully (see below) and have a new PT of $20.” Finish Line closed on Thursday at $19.04.