UPDATE: Credit Suisse Initiates Coverage on Fairway Group Holdings Corp. with Outperform Rating, $22 PT on Good Potential Upside

In a report published Monday, Credit Suisse analyst Edward J. Kelly initiated coverage on Fairway Group Holdings Corp.

with an Outperform rating and $22.00 price target. In the report, Kelly noted, “We are initiating coverage on FWM with an Outperform rating and a $22 target price, implying upside potential of 20%. FWM is an iconic, differentiated food retailer in the New York metro area with a highly profitable store model and significant runway for expansion, in our view. We see sustained sales growth of 20%+ and EBITDA growth of over 30%, with potential for upside from stronger than expected store expansion. While valuation appears rich and the story has some risk, we believe the market still under-appreciates the opportunity in this early cycle growth company. FWM's combination of high-quality product, broad selection, strong customer service, and competitive pricing has driven robust sales productivity of over $1,000/sq. ft. and new store returns of over 40%. The company is a unique one-stop-shop destination for natural/organics, high-end specialty, and traditional customers, and should take share from multiple formats.” Fairway Group Holdings Corp. closed on Friday at $18.30.