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Companhia Brasileira de Distribuicao (NYSE:CBD) was downgraded by Zacks from a “neutral” rating to an “underperform” rating in a research report issued on Thursday. They currently have a $47.00 price target on the stock. Zacks‘s price objective would suggest a potential downside of 8.26% from the stock’s previous close.

Zacks’ analyst wrote, “We are downgrading our recommendation on Companhia Brasileira de Distribuicao to Underperform from Neutral as the company is facing constant margin pressure owing to its aggressive pricing strategy started since May 2013. The strategy focused on lowering its selling prices, which has helped it to win customers albeit at the cost of sacrificing its gross margins. Though the company reported double-digit sales growth in the second quarter of 2014, driven by World Cup sales, new store openings and positive same-store sales growth gross margin contracted 30 basis points from the prior-year quarter to 26%. Tough macroeconomic conditions and currency translation headwinds also remain overhangs. In fact, we do not expect macroeconomic conditions and consumer sentiment to recover over the near term.”

Shares of Companhia Brasileira de Distribuicao (NYSE:CBD) traded down 0.84% during mid-day trading on Thursday, hitting $50.80. 87,895 shares of the company’s stock traded hands. Companhia Brasileira de Distribuicao has a 1-year low of $37.83 and a 1-year high of $51.99. The stock has a 50-day moving average of $49.04 and a 200-day moving average of $46.28. The company has a market cap of $13.457 billion and a P/E ratio of 23.81.

Companhia Brasileira De Distribuicao (NYSE:CBD) is a Brazil-based food retailer.

To get a free copy of the research report on Companhia Brasileira de Distribuicao (CBD), click here. For more information about research offerings from Zacks Investment Research, visit Zacks.com

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