UPDATE: Deutsche Bank Upgrades The Fresh Market to Buy on Sales Strength

Deutsche Bank upgraded its rating on The Fresh Market

from Hold to Buy and increased its price target from $49 to $61. Deutsche Bank said, "With shares off ~13% from its 52-wk high and short interest elevated at 13.5%, we are upgrading TFM to Buy from Hold as we believe 1Q ID sales strength has continued into 2Q, providing for expense leverage above our prior view. To be honest, our confidence mainly stems from WFM's +9.5% ID QTD, a 270 bps sequential acceleration on a 2-yr basis. As a reminder, TFM has a 92% correlation with WFM's 2-yr ID's. Moreover, TFM possesses meaningful (5x) store expansion opportunity. Net, the combination of (1) HSD ID's, (2) low teen sq. ft. growth, and (3) margin expansion opportunity supports our 33x target multiple and $61 PT, which implies ~20% upside." The Fresh Market closed at $51.37 on Wednesday.