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Safeway Still a “Sell” at UBS; Doesn’t Expect Good Q2 amid Market Share, Gross Margin Concerns (SWY)

By Dividend.com,  July 09, 2012, 08:31:29 AM EDT

Supermarket chain operator Safeway Inc. ( SWY ) on Monday caught some continued bearish commentary from analysts at UBS.

The firm maintained its "Sell" rating and $17 price target on SWY, suggesting a small downside to the stock's Friday closing price of $17.71.

UBS noted it's staying away from SWY ahead of its upcoming earnings report. The company is slated to deliver its second quarter earnings report on Thursday, July 19. The analyst also said that major supermarkets are fighting for market share and may have to sacrifice margins in order to drive store traffic.

Safeway shares were mostly flat in premarket trading Monday.

The Bottom Line
Shares of Safeway ( SWY ) have a 3.95% dividend yield, based on Friday's closing stock price of $17.71. The stock has technical support in the $15-$16 price area. If the shares can firm up, we see overhead resistance around the $19-$20 price levels.

Safeway Inc. ( SWY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: SWY



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