Deutsche Bank Lowers SVU To $8 Following Guidance Reduction

Management cut SuperValu Inc. SVU FY (Feb '11) EPS guidance by $0.20 mid-to-mid to a range of $1.25 - $1.35 (ex- items), while ID sales, ex-fuel, guidance was cut to -6.0% from -5.5%, Deutsche Bank reports. “This was the 2nd sharp, downward revision to guidance in 3 months and underscores the myriad challenges facing the company: a cautious consumer, more intense competition from discounters, and strategic initiatives slow to gain traction,” Deutsche Bank writes. “We are lowering our FY10 (fiscal '11) EPS est to $1.30 (-35% y/y) from $1.53; our new FY11 EPS est is $0.95 (-27% y/y) from $1.45. We are lowering our FY10 EBITDA est to $1.94B (-12%) from $2.02B; our new FY11 EBITDA est is $1.74B (-10% y/y) from $1.94B.” As a result, Deutsche Bank's new PT is $8, down from $11. SuperValu Inc. closed Tuesday at $7.59.