Grocery Outlet set for best day ever after upbeat report, Morgan Stanley upgrade

** Grocery Outlet GO shares were up 38.8% in their biggest daily pct gain in the stock's history on Wed after the company gave an upbeat adj EPS results and profit forecast, and Morgan Stanley raised its rating on the stock to "equal-weight" from "underweight"

** Morgan Stanley also raised its price target on the stock to $16 from $13; the stock was last at $18.07

** The co late Tues beat analyst expectations on Q2 adj EPS and it raised its FY adj profit forecast to 75-80c/shr from 70-75c. It also reaffirmed its fiscal 2025 net sales outlook

** Jefferies analysts wrote in a note, "GO delivered a solid Q2 EPS beat" with stronger-than-expected gross margin, and the co raised its FY EPS guidance "supported by lower interest expense..."

** They added: "Strategic initiatives—store clustering, merchandising pilots, and systems upgrades—are gaining traction, with early signs of comp and margin improvement. We remain constructive on the turnaround and LT growth potential."

** The median 12-mo PT on the stock is $16; the avg analyst rating on the stock is a "hold" according to LSEG data

** Including the session move, GO is up about 16% YTD compared with a roughly 9% gain in the Nasdaq IXIC in that time

** Short interest was about 17% of the float, based on LSEG data