UBS Maintains a 'Neutral' on SUPERVALU (SVU); Debt Burden May Cause Disconnect with Potential Buyers
Tweet Send to a FriendGet Alerts SVU Hot Sheet
Price: $6.45 -0.46%
Rating Summary:
1 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
1 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade SVU Now!
UBS maintains a 'Neutral' on SUPERVALU (NYSE: SVU) price target of $2.20 (from $4.00).
Analyst, Jason DeRise, said, "The current Supervalu 13FYe EV/EBITDA is 4.9x compared to debt/EBITDA of 4.6x (includes on and off balance sheet pensions). But, a sum of the parts analysis reveals a problem: the market implied supermarket division EV/EBITDA of 3.9x is below this division’s 4.4x debt/EBITDA (UBSe). SVU cannot offload its supermarkets at any valuation; it can only sell it for a premium (otherwise debt/EBITDA goes up). We believe potential buyers are unlikely to bid at a premium. Therefore, we see low chance of SVU being bought (part or whole)...A gradual turnaround is the most likely scenario: but stay on the sidelines."
FY13 EPS estimate lowered from $0.63 to $0.62 and FY14 from $0.64 to $0.56.
For an analyst ratings summary and ratings history on SUPERVALU click here. For more ratings news on SUPERVALU click here.
Shares of SUPERVALU closed at $2.12 yesterday, with a 52 week range of $1.68-$8.75.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
Analyst, Jason DeRise, said, "The current Supervalu 13FYe EV/EBITDA is 4.9x compared to debt/EBITDA of 4.6x (includes on and off balance sheet pensions). But, a sum of the parts analysis reveals a problem: the market implied supermarket division EV/EBITDA of 3.9x is below this division’s 4.4x debt/EBITDA (UBSe). SVU cannot offload its supermarkets at any valuation; it can only sell it for a premium (otherwise debt/EBITDA goes up). We believe potential buyers are unlikely to bid at a premium. Therefore, we see low chance of SVU being bought (part or whole)...A gradual turnaround is the most likely scenario: but stay on the sidelines."
FY13 EPS estimate lowered from $0.63 to $0.62 and FY14 from $0.64 to $0.56.
For an analyst ratings summary and ratings history on SUPERVALU click here. For more ratings news on SUPERVALU click here.
Shares of SUPERVALU closed at $2.12 yesterday, with a 52 week range of $1.68-$8.75.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- Jefferies Bumps Zumiez (ZUMZ) Numbers Up, But Remains on Sidelines
- Needham & Company Lifts Numbers on Marvell (MRVL) on Solid Results
- Janney Capital Boosts PT on Gap (GPS) Post Q1
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change, Trader TalkRelated Entities
UBS
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
