UPDATE: Goldman Sachs Downgrades Family Dollar Stores to Neutral on Weaker Trends
In a report published Thursday, Goldman Sachs analyst Stephen Grambling downgraded the rating on Family Dollar Stores (NYSE: FDO) from Buy to Neutral, and lowered the price target from $69.00 to $65.00.
In the report, Grambling noted, “We downgrade FDO to Neutral from Buy. Ahead of the F2Q13 print, we expected re-accelerating 2H trends to re-rate the shares. With results coming in even weaker than expected and gross margin pressure likely to linger, we are reducing our FY13/14/15 estimates to $3.77/$4.10/$4.60 from $3.99/$4.39/$4.99. As such, we no longer expect trends to re-accelerate in 3Q and see more limited upside to our revised 12-month $65 price target. Since adding FDO to the Buy List on 8/14/11, the shares are +23% vs. the S&P 500 +35%. Our Buy call has not played out as the multiple re-rating was driven by downward revisions vs. accelerating fundamentals.”
Family Dollar Stores closed on Wednesday at $60.44.
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