UPDATE: Credit Suisse Reinstates Coverage on SUPERVALU with Neutral Rating, $6 PT on Remaining Challenges

In a report published Friday, Credit Suisse analyst Edward J. Kelly reinstated coverage on SUPERVALU

with a Neutral rating and $6.00 price target. In the report, Kelly noted, “We reinstated coverage of SVU with a Neutral rating and a target price of $6. SVU's divestiture of many of its struggling supermarket assets has provided life to a company that was in freefall a few months ago. We generally view the company's change in strategic direction as a large positive, as management has freed itself of the anchor of its worst performing businesses and can now focus on its better positioned assets (Save-A-Lot and distribution). The 20%+ private equity ownership should also provide some downside support. That being said, we are staying on the sidelines on the name. While the potential of the restructured company is clear, there is still significant wood to chop in the turnaround and the risk/reward is not quite attractive enough in our view following the recent move in the stock.” SUPERVALU closed on Thursday at $5.98.