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Kirkland's hits multiyear high as stock upgraded

NEW YORK (AP) -- Kirkland's stock reached a multiyear high Friday after the home decor company posted a smaller-than-expected second-quarter loss and raised its full-year earnings forecast. An analyst upgraded the retailer's rating and lifted her price target for the stock.

THE SPARK: Kirkland's Inc. said Thursday that it lost 3 cents per share during the quarter, much smaller than the loss of 10 cents per share analysts polled by FactSet expected.

The company now anticipates fiscal 2013 earnings between 80 cents and 90 cents per share. Its prior outlook was for earnings of 75 cents to 85 cents per share. Wall Street is calling for full-year earnings of 85 cents per share.

THE ANALYSIS: Wedbush's Joan Storms boosted Kirkland's rating to "outperform" from "neutral" and increased her price target to $22 from $16.

In a client note, Storms said that the company has managed to differentiate its merchandise, taking care to concentrate on current styles and freshen its offerings regularly. This encourages shoppers to make more frequent visits, while its value-oriented pricing appeals to cost-conscious consumers, she said.

A representative for Kirkland's did not immediately respond to an email seeking comment.

SHARE ACTION: The shares gained $1.04, or 5.6 percent, to $19.51 in midday trading. Earlier in the session the stock touched $19.74, the highest level since June 2010.