StreetInsider.com - Goldman Sachs Upgrades SUPERVALU (SVU) to Neutral, Sell-Off Overdone

StreetInsider.com - Goldman Sachs Upgrades SUPERVALU (SVU) to Neutral, Sell-Off Overdone

 Goldman Sachs upgraded SUPERVALU (NYSE: SVU) from Sell to Neutral with a price target of $3.00 (from $5.00).

The firm said the recent sell-off leaves the risk-reward ratio more balanced.

"We continue to see a combination of secular and cyclical headwinds converging with SVU's higher financial leverage to pressure results and limit free cash flow available to
shareholders," the analyst said. "However, the market appears to be discounting this scenario with the shares now trading at an 8% discount to the peer group at 5.7X CY13 pension-adj. EV/EBITDA and a 13% discount on a straight EV/EBITDA valuation of 4.1X."