UPDATE: Wedbush Upgrades Kirkland's on Multiple Positive Factors

In a report published Friday, Wedbush analyst Joan Storms upgraded the rating on Kirkland's (NASDAQ: KIRK) from Neutral to Outperform, and raised the price target from $16.00 to $22.00.

In the report, Wedbush noted, “We view Kirkland's as a viable competitor in home furnishings and accessories, with a well-differentiated merchandising strategy and significant organic growth opportunities. We are upgrading to OUTPERFORM given 1.) Q2 Beat: LPS came in BTE on in-line sales as MM improved dramatically as benefits from merchandising systems begin to accrue and strong inventory management. 2.) Better visibility on sustainable merchandising improvements going forward: the company has invested not only in systems, but also in personnel and better processes, which is translating to better buying in key categories such as wall décor and decorative accessories as well as higher conversion rates and average ticket; business was consistent throughout Q2 and comps turned positive in August. 3.) Guidance looks conservative: annual EPS only upped by less than Q2 beat ,with upside potential from comps and gross margin, which should more than offset important marketing investments (following successful test in Q1/Q2) to drive store traffic.”

Kirkland's closed on Thursday at $18.47.