Grocery Outlet Holding shares rise following Jefferies upgrade

Shares of discount retailer Grocery Outlet Holding Corp (NASDAQ:GO) saw a notable rise of 6.1%, reaching $14.74 following an upgrade from Jefferies, which raised its rating on the stock from "hold" to "buy" and boosted the price target (PT) to $18 from $13. Jefferies analysts highlighted the company's strong defensive positioning as a low-price grocer, which they believe will drive outperformance during periods of economic uncertainty. This is attributed to Grocery Outlet's compelling value proposition and its differentiated business model, which includes opportunistic sourcing and an independent operator structure. Despite potential risks tied to tariff exposure—since Grocery Outlet imports produce from Mexico—Jefferies remains optimistic. They estimate an adjusted EBITDA margin of 5.7% for FY25, slightly outperforming the consensus estimate of 5.6%. Currently, two out of 15 brokerages rate the stock as a "buy" or higher, with 11 holding a "hold" rating and two advising "sell." The median price target across brokerages stands at $14.50, according to data compiled by LSEG. However, despite the recent uptick, Grocery Outlet's stock is still down 11% year-to-date as of the last close.