UPDATE: Jefferies Upgrades Diamond Foods to Hold; Revenue Loss Did Not Compress Margins

Jefferies upgraded Diamond Foods

from Underperform to Hold and raised the price target from $11.00 to $15.00. Jefferies analyst Thilo Wrede noted, "We are raising DMND to Hold from Underperform with a new $15 PT as our bear thesis of combined revenue and margin pressure did not play out. Even though DMND continues to face revenue losses, the company apparently cut enough unprofitable SKUs and reduced costs to enhance margins, an event that we had underestimated. Together with the potential for eventually covering the remaining 29% of short interest, we see only limited downside." Diamond Foods closed at $15.89 on Tuesday.