Supermarket chain operator Safeway Inc. (
) on Thursday caught a big downgrade from analysts at Jefferies
The firm cut its rating on SWY from "Buy" to "Hold" and slashed
its price target from $21 to $17. That new target suggests a
smaller 6% upside to the stock's Wednesday closing price of
A Jefferies analyst commented, "We are downgrading SWY as sales
upside driven by just for U appears limited. In addition, industry
fundamentals are weakening, in part due to higher gas prices and an
acceleration of competitive openings, which may be compounded by a
spike in food inflation. With the near-term catalysts seemingly
gone, and no additional company-specific or macro drivers on the
horizon, valuation remains a lone positive for the equity."
Additionally, the firm lowered its 2012 earnings estimate from
$2.00 to $1.94 per share, and 2013 from $2.32 to $2.15.
Safeway shares fell 21 cents, or -1.3%, in premarket trading
The Bottom Line
Shares of Safeway (
) have a 4.38% dividend yield, based on last night's closing stock
price of $15.97. The stock has technical support in the $12-$14
price area. If the shares can firm up, we see overhead resistance
around the $18-$20 price levels.
Safeway Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.1 out of 5 stars.
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, as well as a detailed explanation of
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