Zacks Investment Research upgraded shares of Freds Inc (FRED) from UNDERPERFORM to NEUTRAL on July 12, 2013, with a target price of $18.00.
We are upgrading our recommendation on Fred's from Underperform to Neutral as we are impressed by the company's initiatives to improve sales. Although the company's same store sales have been declining for the past several months, it has embarked on a reconfiguration plan in June as a turnaround effort. Management is expanding its stores to reach out to more customers. It is also shifting its focus to higher margin products and is remodeling its stores to highlight them. Moreover the company's thrust on pharmacy sector is also quite encouraging, as the department contributes substantially to Fred's operating income. We decide to remain on the sidelines for now and await to see if these initiatives bring any positive effects on the company's top line.
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