Jefferies analyst Corey Tarlowe upgraded the rating on Grocery Outlet Holding (GO – Research Report) to a Buy today, setting a price target of $18.00.
Corey Tarlowe has given his Buy rating due to a combination of factors that highlight Grocery Outlet Holding’s potential for growth and recovery. The company’s position as a low-price grocer is seen as a strategic advantage, especially during economic downturns, which could lead to outperformance compared to its peers. Despite past challenges with enterprise-wide technology issues, the new management team is making strides in improving operations and resolving these problems, presenting an opportunity for upside potential.
Moreover, the company’s valuation is currently below its five-year average, suggesting room for appreciation. The new leadership, including a new President and CEO, is expected to steer the company towards better performance by focusing on price competitiveness and operational efficiency. Additionally, solid traffic trends and a focus on expanding units in existing markets are expected to support future growth, with projected improvements in same-store sales and EBITDA margins over the next few years.
Tarlowe covers the Consumer Cyclical sector, focusing on stocks such as Costco, TJX Companies, and Foot Locker. According to TipRanks, Tarlowe has an average return of 11.9% and a 59.35% success rate on recommended stocks.