UPDATE: Bank of America Upgrades Safeway to Neutral on Moderating Identical Sales Risk

Bank of America upgraded Safeway

from Underperform to Neutral and raised the price objective from $18.00 to $24.00. Bank of America said, "With signs of company initiatives supporting improved sales trends (SWY 4Q12 volumes grew +0.3% – the first positive volume growth in 4 years by our estimates) and stabilizing operating margins (4Q12 op margins expanded for the first time in 17 qtrs), we see less risk to SWY's 2013 IDs ("identical sales") & earnings and are upgrading SWY to Neutral & raising our PO to $24 (from $18). Following ID sales of 0.8% in 4Q12 & 2% 1Q13 qtr-to-date, we see signs that SWY's initiatives are supporting improved volumes & could gain traction in 2013. A stable (though still likely benign) food inflation environment, along w/ little signs of consumer pressure from the 2013 payroll tax and/or gas prices, signal to us that even modest support from company initiatives significantly reduces 2013 ID sales risk." Safeway closed at $22.69 on Friday.