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Investing.com - Jefferies upgraded Koninklijke Ahold Delhaize NV (AS:AD) (OTC:ADRNY) from Hold to Buy and raised its price target to EUR42.00 from EUR39.50.
The upgrade comes as Jefferies believes recent concerns weighing on the stock are overplayed, 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 AD’s existing businesses" and its potential for meaningful consolidation in response to changing competitive dynamics.
The firm specifically mentioned Kroger as "perhaps the most obvious partner" for potential consolidation efforts by Ahold Delhaize.
The upgrade reflects Jefferies’ confidence in Ahold Delhaize’s underlying business strength despite market concerns that have pressured the stock in recent months.
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