Zacks Investment Research upgraded shares of Pao Acucar-Gdr (CBD) from UNDERPERFORM to NEUTRAL on September 20, 2013, with a target price of $50.00.
We are reverting to a Neutral recommendation on P o de A car from Underperform on the back of improved results in the second quarter 2013. Earnings of $0.60 per share increased compared with $0.28 per share in the year-ago quarter, driven by improved sales despite the sluggish retail industry. Overall, sales increased due to cost saving initiatives and new store openings. Same-store sales also increased 7.3% owing to operational improvements in the business segments. CBD's strong market position and economies of scale have also helped the company deliver strong results. Overall, we are encouraged by the company's efforts to enhance its e-commerce business through new websites and online shopping malls. The company's cost savings in its Viavarejo appliance and home furnishings unit is encouraging. However, the company's high debts remain a significant overhang. Moreover, rising input costs, currency translation headwinds and tough employment conditions, particularly in Europe, also remain a threat. The disagreement between the holding groups might also affect the operations of the company.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
To get a free copy of the research report on Pao Acucar-Gdr (CBD),
click here.
For more information about research offerings from Zacks Investment Research, visit
Zacks.com .
Be the first to comment