UPDATE: Jefferies Initiates Coverage on Safeway on Need for Fundamental Turn

In a report published Tuesday, Jefferies analyst Mark Wiltamuth initiated coverage on

with a Hold rating and $32.00 price target. In the report, Jefferies noted, “In June/July, Safeway valuation was in a confused state with the core grocery business trading at only 4.0x EV/EBITDA after adjusting for the recent Canada sale and removing Blackhawk value. With the arrival of an activist, valuation has now reached 5.1x. Marking to market, we believe Safeway needs to turn around declining EBITDA to move the stock from here. We're not convinced the company's three sales initiatives will do it.” Safeway closed on Monday at $31.48.