Arts and crafts retailer Michaels Stores is having its best day ever.
The reason behind this monster move was a simple bullish call from JPMorgan.
Shares of Michaels soared 58.6% on Monday, its biggest one-day jump on record. This wiped out all of the beaten down retailer's losses for the year.
The Wall Street firm upgraded shares of Michaels to overweight from neutral, saying the retailer has an attractive valuation based on an expected re-rating to price-to-earnings ratio on 2021 earnings.
"Given increased optimism around the pace of economic recovery and a wide divide in valuation of haves (essential retailers) and have nots (value/justreopening/levered names), we looked at our universe for upgrade opportunities and believe MIK represents the best upside potential at current prices," JPMorgan analyst Christopher Horvers told clients.
Michaels is the latest speculative move in the economic comeback trade. Stocks don't typically make such large swings in price on an analyst call; however, as the market surges off the March lows, investors are betting on anything that may benefit from the economy reopening.
Shares of Michaels are up more than 750% from their 52-week low in March, but still down about 25% from its February high.
JPMorgan put a $13 per share price target on Michaels, implying a more than 50% rally from its current levels. The firm also added Michaels to its Equity Analyst Focus List as a "value" play.
Horvers also said Michaels' path to positive same-store sales over the next four quarters and new management are catalysts for the stock to rally.
— with reporting from CNBC's Michael Bloom.
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