JPMorgan analyst Christopher Horvers recommends using the pullback yesterday in shares of Michaels as a buying opportunity. While the earnings and operating income guidance was disappointing, the story is intact and the company's digital investments should "widen its lead," Horvers tells investors in a post-earnings research note. Michaels has 12% of its market capitalization in cash, which can be deployed in a 10% accretive accelerated share repurchase or for strategic ends, the analyst contends. He lowered his price target for the shares to $27 from $30 and keeps an Overweight rating on Michaels.

Michaels announced lower prices on over 5,000 items across categories spanning arts, crafts, DIY and home decor, offering customers everyday savings on the products they shop the most. With these latest markdowns, Michaels is helping customers fuel the joy of creativity while maximizing value. Lower prices are now in effect across categories including home decor, art supplies, seasonal items, kids' projects, wall frames, and more. To keep creativity accessible for as many customers as possible, the prices of frequently bought items like paint, markers and pens have been reduced by up to 15%; adhesive and permanent vinyl, papers, stickers, and unfinished wood letters have been reduced by up to 20%; canvases have been reduced by up to 35%, and T-shirts have been reduced by up to 40%.