Zacks Investment Research upgraded shares of Safeway Inc. (SWY) from NEUTRAL to OUTPERFORM on March 15, 2013, with a target price of $29.00.
Safeway reported a strong quarter to end 2012 on a positive note. Although revenues inched up 1.2% during the fourth quarter, the company reported a stupendous 58.2% increase in EPS to record a beat of 39.5% over the Zacks Consensus Estimate. Safeway's Just for U loyalty program was a major positive catalyst driving profitability and market share. On the back of the loyalty program, management expects ID sales to accelerate in 2013. The company's share buyback activity is another upside. On the other hand, Safeway has a deft plan to save costs and sharpen focus on the U.S. retail market. This should help the company to leap on its growth trajectory. Further, we believe that economic recovery should support business momentum for the retail giant. With a challenging 2012 behind us, we look forward to 2013 with full optimism. Thus, we upgrade our recommendation on the company to Outperform.
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