March 13, 2013
05:51 EDT DMND Diamond Foods upgraded to Hold from Underperform at Jefferies
Jefferies upgraded Diamond Foods to Hold citing the company's ability to improve margins. The firm raised its price target for shares to $15 from $11.
efferies sees limited downside - from their report
We are raising DMND to Hold from Underperform with a new $15 PT as our
bear thesis of combined revenue and margin pressure did not play out. Even
though DMND continues to face revenue losses, the company apparently cut
enough unprofitable SKUs and reduced costs to enhance margins, an event that
we had underestimated. Together with the potential for eventually covering
the remaining 29% of short interest, we see only limited downside.
They had a forecast that could be used as a basis for short selling, and are withdrawing it. Giving it a hold is a polite way to say that short sellers should give up on this and start covering. The selloff yesterday was an over reaction, so looks like it can regain the 16.30 or 16.50 level today. Although the quarter was not the best, the conference call was encouraging for the next year term.