Ahead of the Bell: Citi more upbeat on Supervalu

NEW YORK (AP) -- A Citi analyst on Wednesday boosted her price target for Supervalu Inc. by $1, or 50 percent, to $3, on hopes that the grocery store chain is moving closer to selling off some of its assets.

Analyst Deborah Weinswig's prediction suggests she thinks shares will rise 11 percent from Tuesday's close of $2.70. The stock has lost two-thirds of its value this year.

The Eden Prairie, Minn.-based company, like several other supermarkets, has struggled as grocery competition increases and consumers watch their spending after the recession. Supervalu has replaced its CEO, closed stores, cut jobs and suspended its dividend.

Last month the company said it's in talks with several parties over possible deals, and is still reviewing its options.

Asset sales are likely and would result in a much smaller company, Weinswig said.

Despite optimism about potential deals, she kept a "Neutral" rating on Supervalu's shares, citing the company's weak sales growth, tough competition among grocers and slow economic growth in the U.S.