NEW YORK ( TheStreet) -- J.Crew's ( JCG) stock is gaining after the preppy retailer was upgraded to outperform by an analyst. Cowen & Co. said shares of the company are attractively priced, falling 26% since its first-quarter earnings report. With just over 300 full-line stores and factory outlets, its small brick-and-mortar base also means J.Crew has plenty of growth opportunities. But not everyone is convinced of J.Crew's strength. Last week, J.P.Morgan analyst Brian Tunick lowered his estimates and target price on the stock, citing concern concern about merchandise margins headed into the first-half of 2011. "While second-quarter results should come in above Street expectations, we anticipate downbeat commentary from management regarding the second-half of 2010 and 2011 margin trends due to inventory and sourcing; which, coupled with the fact that Street estimates have still yet to see their first downward revisions in over 12 months, should continue to put pressure on shares," he wrote in a note. Tunick now expects full-year profit of $2.48 a share from $2.50, and full-year 2011 earnings of $2.65 a share, from prior outlook of $2.88. He also lowered his price target to $37 from $48. Shares of J.Crew are rising 6.9% to $34.69 in midday trading. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.