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UPDATE: Goldman Sachs Downgrades SUPERVALU as Supermarkets Face Mounting Headwinds

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In a report published Monday, Goldman Sachs analyst Stephen Grambling downgraded the rating on SUPERVALU (NYSE: SVU) from Neutral to Sell, and lowered the price target from $8.00 to $6.00.

In the report, Goldman Sachs noted, “On November 17, we downgraded SVU to Sell from Neutral with 13% downside risk to our new $6, 12-month price target vs. 1% downside for our coverage. While we have been encouraged by the new management team's success in effecting change, we believe cuts to food stamps (SNAP benefits), potential reductions to the transition service agreement, and encroaching competition will likely overwhelm operational improvements. With the shares now trading above the historical P/E average and roughly in line with peers, we expect future downward revisions to consensus estimates will likely drive a re-rating of the shares to a more normalized level. As a result of our Sell rating on SVU and KR, we now move from a Neutral to a Cautious coverage view for the supermarkets.”

SUPERVALU closed on Friday at $6.88.

Latest Ratings for SVU

DateFirmActionFromTo
Jul 2014Cantor FitzgeraldMaintainsBuy
Jun 2014Morgan StanleyInitiates Coverage onUnderweight
Jun 2014Deutsche BankMaintainsHold

View More Analyst Ratings for SVU
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Stephen GramblingAnalyst Color Downgrades Analyst Ratings

 

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