RBC Capital Cuts Price Target on SUPERVALU (SVU) to $6; Reiterates Sector Perform
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RBC Capital reiterated a Sector Perform rating on SUPERVALU (NYSE: SVU), and cut the price target to $6.00 (from $7.00), after the company adjusts outlook. SUPERVALU lowered its FY17 adjusted EBITDA outlook and 2Q identical store sales guidance for SaveA-Lot and its Retail segment. SVU now expects 2Q ID sales at Save-A-Lot and Retail to be lower than 1Q, and FY17 EBITDA to be -5% y/y (from -1.5%).
Analyst William Kirk commented, "After SVU's release and industry presentation, we are lowering numbers. While the wholesale side of the business has shown nice resiliency, the retail portions (including Save-A-Lot) are under intense macro and competitive pressure. If it were just macro pressure, we would be more constructive, but Save-A-Lot overlaps with many of the bestresourced price competitors in (and entering) the market. Reiterating Sector Perform and lowering price target to $6 from $7."
Shares of SUPERVALU closed at $4.95 yesterday.
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