UPDATE: Deutsche Bank Upgrades Fred's on Continued SSS Momentum
In a report published Friday, Deutsche Bank analyst Paul Trussell upgraded Fred's (NASDAQ: FRED) from Sell to Hold, and raised the price target from $10.00 to $15.00.
In the report, Deutsche Bank noted, “We are upgrading shares of FRED to Hold as we believe it has likely reached an inflection point on SSS (June SSS +4.5%). Importantly, positive comps in the Pharmacy segment (36% of sales) occurred for the first time in 10 months, which could signal less pressure from the branded to generic shift. Additionally, the Reconfiguration Plan appears to be gaining traction with core customers, led by sales in Automotive and Hardware. With easy compares on the horizon, 2H SSS could be ahead of guidance of ‘Flat to +2.0%,', driving better than expected EPS performance. We await more consistent results before turning more constructive.”
Fred's closed on Thursday at $16.74.
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