UPDATE: Citigroup Raises PT on Safeway Following 3Q13 EPS Report
In a report published Monday, Citigroup analyst Deborah L. Weinswig reiterated a Neutral rating on Safeway (NYSE: SWY), and raised the price target from $31.00 to $33.00.
In the report, Citigroup noted, “SWY reported 3Q13 EPS of $0.10 from cont. ops, excl. Canada and (-$0.03)/share impairment and incl. Chicago, below our est. of $0.17 and consensus of $0.16, and vs. $0.16 LY. ID sales ex-fuel were essentially in-line with our est., while GM and O&A leverage fell short. In addition, SWY has announced intentions to exit Chicago by early 2014, resulting in a cash tax benefit of $400-450M. The company will sell the 72 stores piecemeal, with 4 already gone to New Albertsons. We are pleased with the decision and speedy progress and we believe there could be further opportunities to unlock additional shareholder value through non-core asset divestitures, but for now SWY is still closing on Chicago and Canada. We reiterate our Neutral rating and raise our target price to $33, vs. $31 prev.”
Safeway closed on Friday at $33.75.
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