UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on Chico's FAS on Continued Top-Line Growth

In a report published Wednesday, J.P. Morgan reiterated its Overweight rating on Chico's FAS

, but lowered its price target from $21.00 to $19.00. J.P. Morgan noted, “During the depths of the recession when the company was losing money, they cut expenses, downsized the organization, improved the product turn and brought in key senior level talent. In 2010, the customer returned and responded to the improved product offering while the business ramped up for ongoing profitable growth. Within a backdrop of a rationalizing competitive landscape, CHS has a number of company specific margin enhancing opportunities which could ultimately drive the business back to a low to mid teens operating margin over the next several years (vs. 11.2% in FY12 and 21% peak), yielding north of $1.75 in earnings power over the next few years. We expect CHS to continue to drive LDD top line growth in the longer term (with +HSD in FY13) and flow the results through to roughly mid teens EPS annual expansion.” Chico's FAS closed on Tuesday at $17.24.