Morgan Stanley Issues Pessimistic Forecast for Grocery Outlet (NASDAQ:GO) Stock Price

Key Points

• Morgan Stanley cut its price target on Grocery Outlet to $7 (from $11) with an "equal weight" rating, implying about a 20% downside from the prior close.
• Other brokers have also trimmed targets and the consensus sits at a cautious "Reduce" with an average price target of $11.73 (1 Buy, 10 Hold, 2 Sell reported).
• Grocery Outlet reported Q4 revenue up 10.7% to $1.22B but missed EPS estimates ($0.19 vs. $0.21) and issued weak FY2026 guidance of $0.45–$0.55 EPS (well below Street expectations), which is the main driver of investor concern.

Grocery Outlet (NASDAQ:GO - Get Free Report) had its price objective cut by analysts at Morgan Stanley from $11.00 to $7.00 in a note issued to investors on Thursday,Benzinga reports. The brokerage presently has an "equal weight" rating on the stock. Morgan Stanley's target price indicates a potential downside of 20.36% from the stock's previous close.

Other research analysts have also issued reports about the company. TD Cowen cut their target price on Grocery Outlet from $18.00 to $16.00 and set a "hold" rating for the company in a research note on Wednesday, November 5th. UBS Group reissued a "neutral" rating and issued a $11.50 price target on shares of Grocery Outlet in a report on Thursday, December 18th. The Goldman Sachs Group reduced their price objective on shares of Grocery Outlet from $12.00 to $9.00 and set a "sell" rating for the company in a report on Thursday, February 19th. DA Davidson reissued a "neutral" rating and issued a $15.00 target price on shares of Grocery Outlet in a research note on Thursday, December 4th. Finally, 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 report on Wednesday, November 5th. One analyst has rated the stock with a Buy rating, ten have assigned a Hold rating and two have issued a Sell rating to the company. According to MarketBeat, the company currently has an average rating of "Reduce" and an average price target of $11.73.

Grocery Outlet Stock Down 0.9%

NASDAQ GO opened at $8.79 on Thursday. Grocery Outlet has a twelve month low of $8.73 and a twelve month high of $19.41. The stock has a market cap of $862.65 million, a PE ratio of -175.80, a PEG ratio of 1.80 and a beta of 0.50. The firm has a 50-day simple moving average of $9.79 and a 200 day simple moving average of $12.74. The company has a debt-to-equity ratio of 0.40, a quick ratio of 0.25 and a current ratio of 1.30.

Grocery Outlet (NASDAQ:GO - Get Free Report) last issued its quarterly earnings results on Wednesday, March 4th. The company reported $0.19 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.21 by ($0.02). Grocery Outlet had a negative net margin of 0.10% and a positive return on equity of 5.86%. The firm had revenue of $1.22 billion for the quarter, compared to the consensus estimate of $1.23 billion. During the same quarter in the prior year, the firm earned $0.15 earnings per share. The company's revenue was up 10.7% on a year-over-year basis. Grocery Outlet has set its FY 2026 guidance at 0.450-0.550 EPS. On average, research analysts forecast that Grocery Outlet will post 0.63 EPS for the current year.

Hedge Funds Weigh In On Grocery Outlet

Large investors have recently made changes to their positions in the company. Hussman Strategic Advisors Inc. acquired a new stake in Grocery Outlet in the third quarter worth about $2,696,000. Intech Investment Management LLC bought a new position in shares of Grocery Outlet in the 2nd quarter valued at about $3,835,000. Eisler Capital Management Ltd. grew its position in shares of Grocery Outlet by 178.5% during the 2nd quarter. Eisler Capital Management Ltd. now owns 227,101 shares of the company's stock worth $2,821,000 after buying an additional 145,554 shares during the period. Rice Hall James & Associates LLC grew its position in shares of Grocery Outlet by 165.1% during the 3rd quarter. Rice Hall James & Associates LLC now owns 315,898 shares of the company's stock worth $5,070,000 after buying an additional 196,737 shares during the period. Finally, Heartland Advisors Inc. bought a new stake in shares of Grocery Outlet during the third quarter worth approximately $4,448,000. Institutional investors and hedge funds own 99.87% of the company's stock.

Key Grocery Outlet News

Here are the key news stories impacting Grocery Outlet this week:

• Positive Sentiment: Revenue and margins improved year-over-year: Q4 sales rose ~10.7% to $1.22B and gross profit increased ~11.5%; operating cash flow and cash balances also grew, which supports near-term liquidity. Read More.
• Neutral Sentiment: The company noted an extra 53rd week in the period (complicates year‑over‑year comps) and announced a formal “Optimization Plan” to improve execution, profitability and cash flow — the plan could help margins long term but may include near‑term charges/costs. Read More.
• Negative Sentiment: Reported EPS missed estimates: Q4 EPS $0.19 vs. consensus ~$0.21 and revenue slightly below forecasts — investors view the miss as a sign of margin pressure. Read More.
• Negative Sentiment: FY2026 guidance came in below Street expectations: EPS guide of $0.45–$0.55 (consensus ~$0.77) and revenue guide of ~$4.6–4.7B vs. ~4.8B consensus — this weaker outlook is the primary driver of investor concern. Read More.
• Negative Sentiment: GAAP/one‑time items drove large reported operating and net losses in some reports (Quiver highlighted an operating loss and a GAAP diluted loss per share), amplifying the market reaction; shares reportedly fell sharply after the release. Read More.
• Negative Sentiment: Notable insider and institutional selling reported in the quarter (including large fund reductions), which can add selling pressure following the weak report and guide. Read More.

Grocery Outlet Company Profile

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.

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