Wall Street is bullish on Supervalu
Though Supervalu’s (SVU) stock has delivered below-average performance this year, Wall Street believes there’s scope for revival. Analysts, on average, are expecting a 69% rise in SVU’s stock price over the next 12 months. The company, which was trading at $14.54 as of April 19, has been assigned a target price of $24.56. Individual target prices range between $14 and $55.
SVU has better upside than peers. Share prices of supermarkets Kroger (KR) and Sprouts Farmers (SFM) are predicted to rise 12% and 18%, respectively, while wholesalers United Natural Foods (UNFI) and Sysco (SYY) are likely to rise around 9% and 8%, respectively.
Supervalu is covered by 11 Wall Street analysts. Together, they rate the stock as a 2.8 on a scale of one (strong buy) to five (sell).
Competitors have a better rating than SVU. Kroger and Sprouts Farmers Market have been rated 2.3 and 2.1, while United Natural Foods and Sysco are rated 2.7 and 2.4, respectively.
Of the 11 analysts who rate SVU, 18% recommend buying the stock, 64% support holding it, and 18% suggest selling it.
Credit Suisse initiated coverage on SVU with an “underperform” rating on April 18. Analyst Judah Frommer believes SVU’s inferior customer base and lost Albertsons TSA revenue restricts the company’s ability to grow its EBITDA (earnings before interest, tax, depreciation, and amortization) in the near term.