UPDATE: Canaccord Downgrades Rent-A-Center to Hold on Continued Core RTO Weakness

In a report published Friday, Canaccord Genuity analyst Laura Champine downgraded the rating on Rent-A-Center

from Buy to Hold, and lowered the price target from $42.00 to $37.00. In the report, Champine noted, “We are lowering our estimates, near- and long-term, for RCII's core RTO business. The business is mature and seems neglected as the company focuses on its growth vehicles. Our new estimates call for sustained sales declines for the core RTO segment (82% of Q1 sales) with FY13 SSS of -3.9% on top of +0.1% followed by -3% in FY14. We believe recent share buybacks may not be enough to mask weakness in the core. We are reducing our FY13 EPS estimate by $0.01 to $3.06, and our FY14 estimate of $3.19 is $0.07 below our prior forecast and $0.24 below consensus, which does not yet include recent share repurchases.” Rent-A-Center closed on Thursday at $35.80.