In a report released today, Oliver Chen from TD Cowen maintained a Hold rating on Grocery Outlet Holding (GO – Research Report), with a price target of $15.00.
Oliver Chen’s rating is based on a combination of factors that suggest a cautious outlook for Grocery Outlet Holding. The company has shown some positive signs, such as a 3% increase in comparable store sales driven by traffic, which exceeded market expectations. However, the earnings per share fell short of projections, and the adjusted EBITDA margin was lower than anticipated, partly due to technological upgrades and strategic restructuring costs.
Looking ahead, Grocery Outlet is expected to slow down its expansion to reassess priorities and focus on improving inventory planning and financial reporting. The company’s leadership changes are seen as promising, but the anticipated reset year in 2025 suggests that any upside may take time to materialize. The stock’s price target has been adjusted to $15, acknowledging that while the company’s fundamentals remain strong, the path to margin recovery and growth is still uncertain.
Chen covers the Consumer Cyclical sector, focusing on stocks such as The Estée Lauder Companies, Capri Holdings, and Sally Beauty. According to TipRanks, Chen has an average return of 6.0% and a 52.80% success rate on recommended stocks.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $17.00 price target.
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