Roundy's Downgraded to “Neutral” at Bank of America (RNDY)
Roundy's (NASDAQ:RNDY) was downgraded by analysts at Bank of America from a “buy” rating to a “neutral” rating in a research report issued to clients and investors on Friday, AnalystRatingsNetwork.com reports. They currently have a $6.00 target price on the stock, down from their previous target price of $8.00. Bank of America’s target price would indicate a potential upside of 21.70% from the company’s current price.
The analysts wrote, “We are lowering our rating on RNDY from Buy to Neutral. RNDY reported F1Q same-store sales (-5.2%) well below our forecast and is guiding for continued samestore sales pressure through 2014. RNDY has also suspended EPS guidance for the full year. We are lowering our 2014 estimate to $0.11 (from $0.34) and 2015 estimate to $0.30 (from $0.45) to incorporate expected dilution from RNDY’s announced agreement (signed yesterday) to sell 18 Rainbow stores for $65mn (at an estimated multiple of roughly 4x EBITDA). Our price objective goes to $6 (from $8), 20x our new 2015E EPS, and implying an EV/EBITDA multiple of 7x. “We believe RNDY’s valuation is still supported by the growth potential of the Mariano’s banner in Chicago, as well as our discounted cash flow analysis (assuming an 8% expected return and 6x terminal value EBITDA multiple).”
Shares of Roundy's (NASDAQ:RNDY) traded up 1.65% on Friday, hitting $4.93. 1,795,210 shares of the company’s stock traded hands. Roundy's has a 1-year low of $4.80 and a 1-year high of $10.96. The stock’s 50-day moving average is $6.58 and its 200-day moving average is $7.88. The company has a market cap of $221.7 million and a P/E ratio of 6.38.
Roundy's (NASDAQ:RNDY) last issued its quarterly earnings data on Wednesday, May 7th. The company reported $0.01 EPS for the quarter, missing the Thomson Reuters consensus estimate of $0.03 by $0.02. The company had revenue of $1.00 billion for the quarter, compared to the consensus estimate of $1.01 billion. During the same quarter in the prior year, the company posted $0.19 earnings per share. The company’s quarterly revenue was up 1.9% on a year-over-year basis. On average, analysts predict that Roundy's will post $0.29 earnings per share for the current fiscal year.
A number of other analysts have also recently weighed in on RNDY. Analysts at Credit Suisse reiterated a “neutral” rating on shares of Roundy's in a research note on Thursday. They now have a $6.00 price target on the stock, down previously from $7.00. Separately, analysts at BofA Merrill Lynch reiterated a “buy” rating on shares of Roundy's in a research note on Thursday, March 27th. They now have a $8.00 price target on the stock. Finally, analysts at Jefferies Group cut their price target on shares of Roundy's from $10.50 to $8.00 in a research note on Thursday, February 20th. Seven investment analysts have rated the stock with a hold rating and one has assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and an average price target of $7.37.
Roundy’s, Inc, formerly Roundy’s Parent Company, Inc, is a retail grocery company headquartered in Milwaukee, Wisconsin.
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