Reading SuperValu’s Northcoast Research Downgrade
SVU was downgraded by Northcoast Research to “neutral” from a “buy” rating on October 19. Four other firms lowered their target prices the same day.
Despite SuperValu (SVU) better-than-expected EPS (earnings per share) and 35% top-line growth in fiscal 2Q18, investors remained unimpressed.
SuperValu (SVU) reported adjusted EPS from continuing operations of $0.46 for fiscal 2Q18, compared with its EPS of $o.21 in fiscal 2Q17.
SuperValu reported robust top-line growth in fiscal 2Q18. Its total sales rose 35% YoY to $2.8 billion, fueled by strong growth in wholesale.
SuperValu (SVU) reported adjusted EPS of $0.46, beating the consensus by $0.10. Total sales from continuing operations stood at $3.8 billion—35% higher YoY.
According to Wall Street analysts, Walgreen Boots Alliance (WBA) has a substantial upside. WBA stock is projected to rise 33% over the next year.
Walgreens Boots Alliance (WBA) traded at $67.40 on October 17, 2017, hitting its three-year low.
For the first nine months of fiscal 2017, Walgreens Boots Alliance’s adjusted diluted net earnings per share increased 7.7% YoY to $3.79.
During the first nine months of 2017 (or 9M17), Walgreens Boots Alliance’s total sales increased 0.9% YoY to $89.5 billion.
Walgreens Boots Alliance (WBA) is slated to release its fiscal 4Q17 earnings on October 25. WBA’s total sales are expected to reach $29.6 billion, a 4.6% increase over its fiscal 4Q16 sales.
The fall in grocery stock prices reflects the rising pessimism in food retail. The pressure increased after Amazon (AMZN) entered the food retail space.
On October 16, 2017, Telsey Advisory lowered SuperValu’s (SVU) target price from $29 to $24 due to ongoing margin pressure.
Ten Wall Street analysts cover Supervalu’s (SVU) stock. The company received a neutral rating of 2.5 from Wall Street. Ratings are on a scale of 1 (strong buy) to 5 (sell).
As we discussed in the previous parts of this series, Supervalu’s (SVU) retail segment has failed to beat increasing competitive pressures and consistently delivered poor results.
As we discussed in the previous part of this series, Supervalu (SVU) is focusing on expanding its wholesale segment as food retail stagnates due to ongoing price competition.
For the second quarter of fiscal 2018, Wall Street has projected Supervalu’s (SVU) total sales landing around $3.78 billion.
The Minneapolis-based Supervalu (SVU) is slated to report its second-quarter 2018 earnings results on Wednesday, October 18.
Of the 25 analysts tracking WBA in October 2017, ~68% recommended a “buy” rating on the stock while the rest suggested a “hold.”
Walgreens is a dividend aristocrat, meaning the company has paid regular dividends for at least the last 25 years.
On October 11, CVS Health touched its 11-month low and traded at $73.90. The company has lost 6.3% year-to-date.