William Blair Reaffirms ‘Outperform’ Call On Annie’s Following Investor Meetings

In a research note released today, William Blair analyst Jon Andersen reiterated coverage with an “Outperform” rating on Annie’s, Inc. (BNNY) following investor meetings with BNNY’s management.

“Last week we hosted investor meetings with Annie’s. While acknowledging recent execution challenges, management reaffirmed the fundamental drivers discussed on the company’s fiscal fourth-quarter conference call in May. More specific, top-line growth well in excess of industry peers has been, and should continue to be, driven by secular demand for natural and organic foods, distribution expansion, mainline placement, and new products. Cost pressures will persist, particularly in the first part of fiscal 2015, although gross margin is expected to begin to recover in the second half as pricing and productivity take hold; and longer term, management expects the ability to leverage operating expenses. We have exercised caution on the name dating back to last fall given valuation, execution risk, and potential for heightened competition; however, at this juncture, a solid innovation pipeline and the prospect of improved margin trends— coupled with the recent earnings reset and share price weakness—probably set the stage for improved relative financial and, in turn, stock price performance. As a result, we like the name for long-term investors seeking exposure to the better-for-you consumer food theme”, Andersen wrote.

According to TipRanks, which measures analysts and bloggers success rate based on how their calls perform, analyst Jon Andersen currently has a one-year average return of 22.3% and a 57% success rate. He is ranked #973 out of 3140 analysts.

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