Supervalu (SVU) Downgraded by Zacks Investment Research to Strong Sell

Zacks Investment Research cut shares of Supervalu (NYSE:SVU) from a hold rating to a strong sell rating in a research note issued to investors on Tuesday.

According to Zacks, “SUPERVALU is battling persistent softness in its retail segment, stemming from stiff competition and intense promotions. As a result, the company has been resorting to retail store closures. Recently, the company unveiled plans to shutter its Shop ‘n Save and Shop ‘n Save East retail businesses, concurrent to its fourth-quarter fiscal 2018 earnings announcement. Well, SUPERVALU continued to battle the aforementioned retail woes during the quarter where its dismal gross margin trend lingered — thanks to unfavorable mix. These hurdles may continue to weigh on SUPERVALU's stock. Nonetheless, the company continued to witness steady growth in its wholesale business, which posted sales growth of a solid 60% during the quarter. This surge was largely backed by buyouts of AG Florida and Unified Grocers. Further, the company is on-track to strengthen its wholesale operations.”

A number of other equities analysts also recently commented on the company. Pivotal Research restated a buy rating and issued a $24.00 target price on shares of Supervalu in a research note on Monday, April 23rd. Credit Suisse Group started coverage on Supervalu in a research note on Tuesday, April 17th. They issued an underperform rating and a $15.00 target price for the company. Goldman Sachs Group set a $14.00 target price on Supervalu and gave the company a sell rating in a research note on Thursday, April 5th. ValuEngine downgraded Supervalu from a sell rating to a strong sell rating in a research note on Tuesday, May 8th. Finally, Morgan Stanley decreased their target price on Supervalu from $17.00 to $15.50 and set an equal weight rating for the company in a research note on Thursday, April 26th. Five research analysts have rated the stock with a sell rating, five have assigned a hold rating and two have given a buy rating to the company. The stock has a consensus rating of Hold and a consensus price target of $20.39.

Shares of Supervalu opened at $20.95 on Tuesday, MarketBeat Ratings reports. The company has a debt-to-equity ratio of 3.69, a current ratio of 1.20 and a quick ratio of 0.57. Supervalu has a 52 week low of $13.60 and a 52 week high of $26.51. The company has a market capitalization of $766.58 million, a price-to-earnings ratio of 10.17 and a beta of 1.23.

Supervalu (NYSE:SVU) last issued its earnings results on Tuesday, April 24th. The company reported $0.61 EPS for the quarter, missing the Zacks’ consensus estimate of $0.79 by ($0.18). Supervalu had a net margin of 0.29% and a return on equity of 20.95%. The company had revenue of $3.59 billion during the quarter, compared to analyst estimates of $3.93 billion. During the same quarter in the previous year, the firm earned $0.64 earnings per share. The business’s revenue was up 42.1% on a year-over-year basis. analysts predict that Supervalu will post 1.86 earnings per share for the current fiscal year.

Hedge funds and other institutional investors have recently modified their holdings of the company. Globeflex Capital L P acquired a new position in shares of Supervalu during the fourth quarter worth approximately $126,000. D.A. Davidson & CO. acquired a new position in shares of Supervalu during the fourth quarter worth approximately $207,000. Metropolitan Life Insurance Co. NY acquired a new position in shares of Supervalu during the fourth quarter worth approximately $274,000. Teacher Retirement System of Texas acquired a new position in shares of Supervalu during the fourth quarter worth approximately $277,000. Finally, Aperio Group LLC boosted its position in shares of Supervalu by 24.9% during the first quarter. Aperio Group LLC now owns 15,842 shares of the company’s stock worth $241,000 after buying an additional 3,159 shares during the period. Institutional investors and hedge funds own 90.54% of the company’s stock.

Supervalu Company Profile

SUPERVALU INC., together with its subsidiaries, operates as a grocery wholesaler and retailer in the United States and internationally. It operates through two segments, Wholesale and Retail. The Wholesale segment engages in the wholesale distribution of various food and non-food products to independent retail customers, such as single and multiple grocery store operators, regional chains, and the military.

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