Grocery Outlet (NASDAQ:GO) Shares Gap Down on Analyst Downgrade

Grocery Outlet Holding Corp. (NASDAQ:GO)’s stock price gapped down before the market opened on Wednesday after Wells Fargo & Company downgraded the stock from an overweight rating to an equal weight rating. The stock had previously closed at $10.09, but opened at $9.62. Wells Fargo & Company now has a $10.50 price target on the stock, down from their previous price target of $16.00. Grocery Outlet shares last traded at $9.94, with a volume of 277,490 shares traded.

Other equities research analysts also recently issued reports about the stock. The Goldman Sachs Group cut their target price on shares of Grocery Outlet from $12.00 to $9.00 and set a “sell” rating on the stock in a research note on Thursday, February 19th. Bank of America dropped their price target on shares of Grocery Outlet from $19.00 to $16.00 and set a “neutral” rating for the company in a research note on Wednesday, November 5th. Morgan Stanley cut their price objective on Grocery Outlet from $14.00 to $11.00 and set an “equal weight” rating on the stock in a research report on Thursday, January 15th. Deutsche Bank Aktiengesellschaft set a $11.00 target price on Grocery Outlet in a report on Thursday, January 8th. Finally, Weiss Ratings restated a “sell (d)” rating on shares of Grocery Outlet in a report on Thursday, January 22nd. Three research analysts have rated the stock with a Buy rating, eight have given a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average price target of $13.64.

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of GO. Aster Capital Management DIFC Ltd grew its position in shares of Grocery Outlet by 1,030.4% during the fourth quarter. Aster Capital Management DIFC Ltd now owns 2,532 shares of the company’s stock worth $26,000 after acquiring an additional 2,308 shares during the last quarter. Bayforest Capital Ltd acquired a new position in Grocery Outlet in the third quarter valued at $29,000. Hantz Financial Services Inc. raised its holdings in shares of Grocery Outlet by 591.5% in the third quarter. Hantz Financial Services Inc. now owns 2,033 shares of the company’s stock valued at $33,000 after buying an additional 1,739 shares during the last quarter. Kestra Advisory Services LLC purchased a new stake in shares of Grocery Outlet in the fourth quarter valued at about $35,000. Finally, PNC Financial Services Group Inc. boosted its stake in shares of Grocery Outlet by 32.3% during the second quarter. PNC Financial Services Group Inc. now owns 2,942 shares of the company’s stock worth $37,000 after buying an additional 719 shares during the period. Institutional investors and hedge funds own 99.87% of the company’s stock.

Grocery Outlet Stock Performance

The stock has a market cap of $962.75 million, a PE ratio of -196.20, a price-to-earnings-growth ratio of 2.03 and a beta of 0.49. The stock has a fifty day moving average of $9.87 and a 200-day moving average of $13.03. The company has a quick ratio of 0.25, a current ratio of 1.30 and a debt-to-equity ratio of 0.40.

About Grocery Outlet

Grocery Outlet Holding Corp. (NASDAQ: GO) is a specialty discount retailer that offers consumers deeply discounted groceries by purchasing excess inventory, closeouts, and overstocks from manufacturers and distributors. Headquartered in Emeryville, California, the company operates two primary banners—Grocery Outlet and Fresh2Go—with a combined footprint of more than 400 stores. Its product assortment spans fresh produce, meat, dairy, bakery items, household staples, natural and organic offerings, and select specialty products, all sold at significant markdowns compared to conventional supermarkets.

The company’s unique buying model enables it to source inventory through opportunistic purchases of surplus freight, discontinued items, and closeout deals, which it then passes on as savings to its customers.