Jefferies Upgrading Diamond Foods

Jefferies & Co. is out with a research report on Diamond Foods (NASDAQ: DMND) and is upgrading shares to Hold with a $94 price target.

In a note to clients, Jefferies & Co. writes, "We are upgrading DMND to Buy from Hold as we consider the recent stock price decline overdone and concerns over grower payment unfounded. Our research indicates that DMND's September payment should not have any negative impact on FY12 earnings and therefore we expect a recovery of the stock price. We continue to like the strong fundamentals, growth outlook and benefits of the Pringles acquisition. Our price target is $94 (unchanged)."

Shares of DMND gained 33 cents on Friday to close at $74.34.