UPDATE: Wedbush Assumes Coverage on Pier 1 Imports with Neutral Rating, $13 PT on Multiple Challenges Ahead

In a report published Wednesday, Wedbush analyst Seth Basham assumed coverage on

with a Neutral rating, down from Outperform, and $13.00 price target, down from $20.00. In the report, Wedbush noted, “We are assuming coverage of PIR with a NEUTRAL (from OUTPERFORM) and a $13 target price (down from $20). While PIR shares are down nearly 50% YTD, valuation is near trough levels and sentiment is negative; structural merchandising gross margin pressures from consumers rapidly shifting home furnishings sales to the lower-margin online channel may lead to disappointment on this key metric into 2015 keeping us sidelined even though we see sales growing and potential for solid cost leverage as investment spending moderates.” Pier 1 Imports closed on Tuesday at $11.89.