UBS notes Metcash has underperformed the ASX 200 since its capital raising in April, despite ongoing strength in the grocery sector.
The strong market backdrop and the outperformance of independent grocers as well as an improving outlook for hardware has caused the broker to upgrade to Buy from Neutral.
Forecasts remain unchanged but the near-term upside risk is building, UBS suspects, because of the favourable trends. Target is $2.85.
Sector: Food & Staples Retailing.
Target price is $2.85.Current Price is $2.65. Difference: $0.20 – (brackets indicate current price is over target). If MTS meets the UBS target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
