Zacks Investment Research upgraded shares of Companhia Brasileira de Distribuicao (Pao de Acucar) from a hold rating to a buy rating in a research report released on Wednesday, August 30th. Zacks Investment Research currently has $26.00 price objective on the stock.
According to Zacks, “Estimates have been rising since CBD reported improved second quarter 2017 sales, driven by strong improvement in Extra Hiper markets and consistent growth at Assai.
However, the reported quarter’s growth was lower than the preceding quarter’s growth. Nevertheless, shares of the company have outperformed the industry over the last six months.
Strong customer traffic expansion and increase in sales volume, offsetting the effect of the slowdown in food inflation. Further, higher gross margins and a decline in selling, general and administrative expenses at Multivarejo boosted EBITDA margin. We are encouraged by company’s operating efficiency and productivity projects.
Store openings and conversion of Extra Hiper stores to Assai is also boosting sales and will help accelerate the expansion of GPA’s cash-and-carry banner into new cities across Brazil. However, challenging economic scenario in Brazil remains a concern.”