Jefferies Downgrades Core-Mark Holding (CORE) to Hold
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Jefferies downgraded Core-Mark Holding (NASDAQ: CORE) from Buy to Hold with a price target of $33.00.
Analyst Christopher Mandeville commented, "Although we appreciate CORE's disciplined bidding approach and believe the industry has not entered a new period of price wars, we are concerned over the loss of Circle K's Southeast as this could lead to N-T deleverage at the company's Tampa DC. While realignment efforts could provide some level of offset, we still see 2017 earnings risk vs.expectations (we are ~2% below cons.). Other topics that bear monitoring include Couche-Tard’s acquisition of CST (a top 5 acct.) and the need to still renew several Circle K regions (West/Southwest/ franchisees), which could both lead to L-T price concessions, and the bid process for CORE’s expiring RAD business (McLane services WBA). While valuation has come off highs and reflects the known negatives, we believe further multiple compression and/or earnings risk remains if any of the aforementioned unknowns come to fruition. L-T, we still believe CORE will be a winner within c-store distribution given its superior scale yet nimble/consistent execution; however, navigating the next few quarters could be difficult."
Shares of Core-Mark Holding closed at $36.85 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesJefferies & Co, Earnings, Definitive Agreement
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