Analyst Kendall Toscano from Bank of America Securities maintained a Hold rating on Grocery Outlet Holding and keeping the price target at $19.00.
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Kendall Toscano has given his Hold rating due to a combination of factors that influence the current and future prospects of Grocery Outlet Holding. The company is undergoing significant changes under the leadership of its new CEO, Jason Potter, who is focusing on enhancing the store experience at scale. This includes testing new store concepts in select locations, which have shown promising results in terms of sales and customer engagement. However, these changes are still in the pilot phase, and the company has not yet provided a timeline for a broader rollout.
Additionally, while Grocery Outlet is working to improve its consistency and product availability, it continues to maintain its unique independent operator model, which allows for a high degree of autonomy in merchandise selection. This model, while beneficial, may limit the company’s ability to fully centralize operations. Furthermore, a recent pricing study indicates that Grocery Outlet’s price competitiveness with Walmart has narrowed, which could impact its market positioning. These factors contribute to the uncertainty in the near term, justifying the Hold rating despite the potential for long-term growth.
In another report released today, UBS also maintained a Hold rating on the stock with a $18.00 price target.
Based on the recent corporate insider activity of 50 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GO in relation to earlier this year.