Grocery Outlet (NASDAQ:GO) Shares Gap Up Following Analyst Upgrade

Key Points

• Grocery Outlet shares rose after Bank of America upgraded the stock to “buy” from “neutral” and increased its price target to $15 from $12.50. Shares opened at $11.64, up from a prior close of $10.95.
• Despite the upgrade, the broader analyst view remains cautious: the consensus rating is “Reduce,” with a $10.50 average price target, based on one Buy, eleven Hold, and two Sell ratings.
• Recent insider purchases included 15,000 shares by Director Carey F. Jaros and 8,000 shares by Paul Miller. Grocery Outlet also exceeded quarterly EPS and revenue estimates, reporting $0.20 EPS on $1.19 billion in revenue, though net margin remained negative.

Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report) shares gapped up prior to trading on Wednesday after Bank of America upgraded the stock from a neutral rating to a buy rating. The stock had previously closed at $10.95, but opened at $11.64. Bank of America now has a $15.00 price target on the stock, up from their previous price target of $12.50. Grocery Outlet shares last traded at $11.3120, with a volume of 260,373 shares changing hands.

Several other research analysts have also recently commented on the stock. Morgan Stanley raised their target price on shares of Grocery Outlet from $7.00 to $11.00 and gave the stock an "equal weight" rating in a report on Thursday, August 13th. DA Davidson upped their target price on Grocery Outlet from $9.00 to $12.00 and gave the company a "neutral" rating in a research report on Thursday, August 13th. Telsey Advisory Group reissued a "market perform" rating on shares of Grocery Outlet in a report on Thursday, August 13th. Deutsche Bank Aktiengesellschaft restated a "hold" rating and issued a $9.00 price target on shares of Grocery Outlet in a research report on Thursday, August 13th. Finally, Weiss Ratings raised shares of Grocery Outlet from a "sell (d-)" rating to a "sell (d)" rating in a research report on Thursday, August 13th. One investment analyst has rated the stock with a Buy rating, eleven have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of "Reduce" and a consensus target price of $10.50.

Insider Buying and Selling at Grocery Outlet

In other Grocery Outlet news, Director Carey F. Jaros bought 15,000 shares of the firm's stock in a transaction on Thursday, August 27th. The shares were purchased at an average price of $11.70 per share, for a total transaction of $175,500.00. Following the completion of the transaction, the director directly owned 60,000 shares in the company, valued at approximately $702,000. The trade was a 33.33% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through this link. Also, insider Paul Miller bought 8,000 shares of the stock in a transaction on Thursday, August 20th. The shares were acquired at an average cost of $10.90 per share, with a total value of $87,200.00. Following the purchase, the insider owned 72,171 shares of the company's stock, valued at approximately $786,663.90. This represents a 12.47% increase in their position. The disclosure for this purchase is available in the SEC filing. 5.60% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Grocery Outlet

Institutional investors have recently added to or reduced their stakes in the stock. Tidal Investments LLC bought a new stake in shares of Grocery Outlet during the second quarter worth $784,000. Engineers Gate Manager LP acquired a new position in Grocery Outlet in the 2nd quarter worth about $310,000. Integrated Wealth Concepts LLC bought a new position in Grocery Outlet in the second quarter valued at about $125,000. Allworth Financial LP raised its position in Grocery Outlet by 30,876.9% in the second quarter. Allworth Financial LP now owns 4,027 shares of the company's stock valued at $40,000 after purchasing an additional 4,014 shares during the last quarter. Finally, Corient Private Wealth LP boosted its stake in shares of Grocery Outlet by 118.2% during the second quarter. Corient Private Wealth LP now owns 30,298 shares of the company's stock valued at $302,000 after purchasing an additional 16,411 shares in the last quarter. 99.87% of the stock is currently owned by institutional investors and hedge funds.

Grocery Outlet Stock Performance

The company has a fifty day moving average price of $10.91 and a two-hundred day moving average price of $9.17. The company has a debt-to-equity ratio of 0.60, a current ratio of 1.29 and a quick ratio of 0.30. The company has a market capitalization of $1.12 billion, a P/E ratio of -2.91, a PEG ratio of 7.72 and a beta of 0.72.

Grocery Outlet (NASDAQ:GO - Get Free Report) last issued its quarterly earnings data on Wednesday, August 12th. The company reported $0.20 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.13 by $0.07. Grocery Outlet had a negative net margin of 8.04% and a positive return on equity of 5.84%. The business had revenue of $1.19 billion during the quarter, compared to analyst estimates of $1.17 billion. During the same quarter last year, the business earned $0.23 EPS. The firm's quarterly revenue was up 1.1% on a year-over-year basis. Equities analysts forecast that Grocery Outlet Holding Corp. will post 0.42 earnings per share for the current fiscal year.

About Grocery Outlet

Grocery Outlet Holding Corp. operates a network of independently operated, extreme-value grocery stores in the United States. The company offers a rotating selection of branded and private-label products at discounted prices, including groceries, fresh produce, meat, dairy, frozen foods, beverages, snacks, household goods and health and beauty products.

Its merchandising model is based on opportunistic buying, allowing Grocery Outlet to purchase surplus inventory, packaging changes, discontinued products and other bargains from manufacturers and distributors.

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