UPDATE: Bank of America Downgrades Retail Opportunity Investments to Underperform on Valuation

Bank of America reduced its rating on Retail Opportunity Investments (NASDAQ: ROIC) from Neutral to Underperform with a reiterated $12 price objective. Bank of America commented, "At this point in the cycle, we prefer general merchandise anchored shopping centers over supermarket anchored. This is due to the increasing volatility of food retailing and the increased competition traditional supermarket retailers face from warehouse clubs (Costco), premium grocers (Whole Foods), discount operators (Aldi's), and the emerging Wal*Mart Neighborhood Supermarket concept. ROIC has the highest exposure to supermarkets relative to peers with 89% of their portfolio anchored by a grocer compared to REG (68%), EQY (56%), and WRI (43%). Of ROIC's top 10 tenants, 6 are supermarkets that account for 14.4% of ABR. We prefer the flexibility of larger, multi-format general merchandise centers."Retail Opportunity Investments closed at $12.28 on Friday.