Grocery Outlet initiated with an Overweight at Wells Fargo

Wells Fargo initiated coverage of Grocery Outlet with an Overweight rating and $28 price target. The analyst says the company’s “choppy” execution and poor investor sentiment yield an attractive entry point in this “defensive, growth story.” Concerns around a softening consumer and plenty of “smoke” in recent updates suggest value models should continue to deliver, the analyst tells investors in a research note. The firm believes Grocery Outlet’s extreme value is resonating and sees support for a low- to mid-single digit comps in the quarters ahead.