J.P. Morgan Reports Family Dollar Rating Downgraded To Neutral

In a report published by J.P. Morgan, Family Dollar Stores FDO saw its rating move to Neutral. J.P. Morgan reported that it is downgrading shares of Family Dollar to Neutral from Overweight with the stock ahead of its December 2011 price target of $49. “Following the recent spike in the stock subsequent to Trian's proposal to acquire the company for $55-$60 as well as our concerns that some risk exists to the company's 2H11 SSS/EPS outlook, we feel its prudent to move to the sidelines at this juncture. From a fundamental perspective, we believe opportunities still remain for the company to narrow the productivity gap that exists with peer Dollar General, especially through its compelling store renovation program; however, near-term risks exist on both the topline and margins, in our view, as 2H11 guidance was not adjusted after the 1Q/December miss.” Family Dollar Stores closed yesterday at $50.11.