UPDATE: Susquehanna Upgraded Finish Line

In a report published Monday, Susquehanna Financial Group analyst Christopher Svezia upgraded Finish Line Inc. (NASDAQ: FINL) from Neutral to Positive and raised the price target from $22 to $31.

Svezia noted opportunity in the third quarter for margins which could lead to margin recovery. The analyst commented, "We believe declining margins at FINL will likely bottom in 3Q (November) given favorable product mix, comparisons and peaking occupancy cost pressure. After six quarters of decline, the margin recovery should accelerate. Our call is on the core FINL store margin structure with the Macy's initiative and digital as call options over the next 12-18 months."

Susquehanna continued that the Finish Line will likely see a Q3 upside, less markdowns and better margins, and the possibility that core margins could reach historic levels. The analyst added that management's long-term goals are achievable in predicting $2.2 billion in sales by FY17 (2016). Management's $2.50 FY14 EPS estimate is below Susquehanna's $1.62, which Svezia comments as "very achievable."

Finish Line closed at $26.30 on Friday and shares are currently trading +3.42%.