Goldman Sachs analyst Kate McShane downgraded Michaels to Sell from Neutral with a price target of $6.50, down from $7.00. Following the 30% gain post the announcement of management changes, Michaels' valuation is extended and does not embed possible headwinds in the business ahead, McShane tells investors in a research note. The analyst sees headwinds coming from the company's major competitor A.C. Moore liquidating inventory, creating near-term margin pressure, competitive challenges from specialty retailers in the Arts & Craft space, and integration risk from the acquisition of up to 40 A.C. Moore stores.