Citi Research upgraded CP All Pcl, Thailand's largest convenience store operator, to 'buy' from 'neutral' and raised its price target to 47.5 baht from 44 baht, citing its recent acquisition of wholesaler Siam Makro Pcl.
The broker maintained a 'sell' rating on Siam Makro with a price target of 640 baht.
Shares of CP All, the most actively-traded stock by turnover, climbed 1.2 percent to 42 baht while Siam Makro shares were up 0.3 percent at 756 baht.
"... We take into account near-term synergies from the Makro acquisition and revise up FY14-15E earnings by around 12 percent, despite the near-term challenge of debt load and uncertainty on capital structure," it said in a report dated May 6.
The CP All-Makro deal would transform Thailand's grocery market sector to favor modern grocery with the combined entity controlling 18 percent of total market and 40 percent of modern grocery, it said.
1100 (0400 GMT)
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(Reporting by Viparat Jantraprap in Bangkok; Editing by Sunil Nair)