NEW YORK (TheStreet) -- Shares of Pier 1 Imports Inc. (PIR) were sinking, down 5% to $12.07 in mid-morning trading Monday, after analysts at Wedbush Securities lowered their rating on the importer of home decor and furniture this morning.
The firm downgraded the company to "neutral" from "outperform" and also cut its price target to $12 from $16.
Wedbush pointed to concerns that merchandise gross profit will continue to be pressured.
"After completing additional store checks, our view has materially shifted," the firm wrote in a note earlier today.
Fort Worth, Texas-based Pier 1 Imports sells decorative accessories, furniture, candles, housewares, gifts and seasonal products in its stores.
As of March 1, 2014 the company operated 991 Pier 1 Imports stores nationwide, 81 Pier 1 Imports stores in Canada, as well as an e-commerce website.
Separately, TheStreet Ratings team rates PIER 1 IMPORTS INC/DE as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PIER 1 IMPORTS INC/DE (PIR) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."