Deutsche Bank Downgrades Fred's Inc. (FRED) to Sell

August 8, 2016 6:36 AM EDT
Get Alerts FRED Hot Sheet
Price: $15.59 -3.47%

Rating Summary:
    1 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Deutsche Bank downgraded Fred's Inc. (NASDAQ: FRED) from Hold to Sell with a price target of $12.00 (from $15.00). Analyst Paul Trussell thinks same-store-sales recovery could be slow, and he said margin pressure is likely to persist.

"We are downgrading shares of FRED to Sell from Hold as we believe headwinds behind 2Q's disappointing comp and margin performance are likely to extend into 2H: 1) in a broader slowdown for Hepatitis C drugs (60%-70% of FRED's specialty business); and 2) vs. increasingly tough competition in the discounter/dollar store space as peers are improving," said Trussell.

"We see potential for further downward guidance revisions, in the same vein as in 2H last year, and are modeling modestly below consensus for this year and next year," added the analyst.

For an analyst ratings summary and ratings history on Fred's Inc. click here. For more ratings news on Fred's Inc. click here.

Shares of Fred's Inc. closed at $14.29 yesterday.

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