UPDATE: Citigroup Reiterates Neutral Rating, Raises PT on SUPERVALU

In a report published Friday, Citigroup reiterated its Neutral rating on SUPERVALU

, and slightly raised its price target from $3.00 to $4.00. Citigroup noted, “SVU reported F3Q13 adj. EPS of $0.03, below our est. of $0.04 and consensus of $0.05, driven by lower-than-expected IDS and worse S&A deleverage, offset by a higher gross margin. The company also announced the sale of five retail grocery banners to a Cerberus-led investor group for $100M in cash and $3.2B of debt, and an equity investment from a Cerberus-led consortium. We had viewed Jewel (which was sold) and Save-A-Lot (which was not) as the most attractive banners. While not deleveraging, the transaction will remove some of the weakest banners, incl. Shaw's/Star Market and Albertsons, and the remaining banners should not require as much price investment. We are raising our target price to $4, up from $3 previously, and we reiterate our Neutral/High Risk rating.” SUPERVALU closed on Thursday at $3.47.