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Investing.com - Jefferies upgraded Koninklijke Ahold Delhaize NV (AS:AD) (OTC:ADRNY) from Hold to Buy while raising its price target to EUR42.00 from EUR39.50.
The upgrade comes as Jefferies believes recent concerns weighing on the grocery retailer are overblown, including U.S. dollar fluctuations, price competition worries, and Amazon’s renewed focus on its food business.
Jefferies noted that Ahold Delhaize’s subsequent derating to a 7.8% free cash yield fails to account for the growing strength of the company’s existing businesses.
The firm also highlighted potential for Ahold Delhaize to pursue "meaningful consolidation" in response to changing competitive dynamics, specifically mentioning Kroger as "perhaps the most obvious partner."
This positive outlook represents a vote of confidence in the Dutch-Belgian grocery retailer’s strategic position despite recent market concerns about its competitive environment.
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