The investment firm also nearly doubled its price target on the shares to a Wall Street high $13 from $7.
At last check shares of the Irving, Texas, chain rose 43% to $7.88. The stock traded for a 52-week low $1 on March 18.
Analyst Christopher Horvers sees Michaels as best-positioned to bounce back from current prices within the group of retailers that were forced to close their stores due to the coronavirus pandemic.
Horvers notes that Michaels has continued its business through the restrictions by adding contactless curbside pickup options and same-day-delivery services for arts-and-crafts enthusiasts.
While comparable sales are down 28% from a year ago, J.P. Morgan is bullish on the company's chances to turn same-store sales positive in the second half of the year.
“Building the path back to positive comps, in the near term we expect continued positive linearity from the first quarter's down 28% as states open," Horvers wrote.
"Moreover, starting in the second quarter, we estimate a [1.2 percentage point] benefit to comparable sales over the next four quarters due to sales recapture from A.C. Moore’s liquidation.”
In November 2019, Nicole Crafts said that it would close all 145 of its A.C. Moore locations.
Michaels assumed the leases for about 40 of those stores as well as the lease for an East Coast distribution facility. Michaels also purchased intellectual property in the deal.
Finally, about 80% of A.C. Moore stores were within five miles of a Michael's location, meaning the company has even greater opportunity to capture market share.