Deutsche Bank Upgrades Fred's Inc. (FRED) to Hold

October 3, 2016 6:43 AM EDT
Get Alerts FRED Hot Sheet
Price: $16.63 +2.09%

Rating Summary:
    1 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Deutsche Bank upgraded Fred's Inc. (NASDAQ: FRED) from Sell to Hold with a price target of $10 (unchanged). The upgrade was tied to valuation.

"We are upgrading shares of FRED to Hold from Sell given a reset bar (2H guidance has been dramatically lowered by mgmt.) and stock price correction (stock is down ~35% since 8/8 vs. the S&P at flat); however, we continue to believe the broader slowdown for Hepatitis C drugs (60%-70% of FRED's specialty business) and the increasingly tough competition in the discounter/dollar store space will cause a slow recovery of margin and comp performance. With the stock now trading below our EV/EBITDA multiple of 8x, we see risk/reward more balanced, and are therefore moving to the sidelines," said analyst Paul Trussell.

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 $9.06 yesterday.

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