Barclays Maintains an 'Equalweight' on SAFEWAY (SWY); Still Sensitive to the Tough Economy
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Price: $35.10 --0%
Rating Summary:
4 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
4 Buy, 15 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Equalweight' on SAFEWAY (NYSE: SWY) price target of $21.00.
Barclays analyst says, "SWY's 2Q11 results demonstrated how vulnerable it is to the tough external environment, and the company surprised us by disclosing that 75% of its customers have seen no recovery in their finances. So rising unemployment and high gas prices are causing consumers to be very careful with their spending, even on basic items, and SWY is getting hurt. Whether or not SWY really is truly at price parity with Kroger (NYSE: KR) - its biggest conventional competitor - most likely the consumer doesn't believe it, and there are lots of value-oriented retail alternatives. We might give SWY a pass if its mid-2000's earnings boost hadn't been driven primarily by large capital investments. Without that, SWY's earnings now would be looking even weaker. Yesterday's one-day move seemed too big to us, yet it brought the stock down to what we think is fair value or ~$21, which is our price target."
"We are lowering 3Q11 EPS to $0.31 from $0.40, FY11 EPS to $1.70 from $1.79, and FY12 EPS to $1.80 from $1.85."
For more ratings news on SAFEWAY click here and for the rating history of SAFEWAY click here.
Shares of SAFEWAY closed at $21.47 yesterday.
Barclays analyst says, "SWY's 2Q11 results demonstrated how vulnerable it is to the tough external environment, and the company surprised us by disclosing that 75% of its customers have seen no recovery in their finances. So rising unemployment and high gas prices are causing consumers to be very careful with their spending, even on basic items, and SWY is getting hurt. Whether or not SWY really is truly at price parity with Kroger (NYSE: KR) - its biggest conventional competitor - most likely the consumer doesn't believe it, and there are lots of value-oriented retail alternatives. We might give SWY a pass if its mid-2000's earnings boost hadn't been driven primarily by large capital investments. Without that, SWY's earnings now would be looking even weaker. Yesterday's one-day move seemed too big to us, yet it brought the stock down to what we think is fair value or ~$21, which is our price target."
"We are lowering 3Q11 EPS to $0.31 from $0.40, FY11 EPS to $1.70 from $1.79, and FY12 EPS to $1.80 from $1.85."
For more ratings news on SAFEWAY click here and for the rating history of SAFEWAY click here.
Shares of SAFEWAY closed at $21.47 yesterday.
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