WhiteWave Foods Co (NYSE: WWAV) is capitalizing on the public’s newfound desire for healthy and convenient food. The packaged food and beverage company’s brands include Horizon Organic, Silk, and Land O’Lakes. WhiteWave acquired Earthbound Farms in January for $600 million, giving it control over America’s largest grower of produce.
WhiteWave Foods is benefiting from the consumer’s desire to have healthy and organic food, even if it means spending more money. The company prides itself on its commitment to food safety, responsible sourcing, and sustainable agriculture. They have been focusing on expanding their offerings for fresh foods and plant based foods and beverages. The consumer shift from thrifty to healthy has also been pronounced by the decline of McDonald Corporation’s (NYSE: MCD) and the rise of Chipotle Mexican Grill Inc (NYSE: CMG).
The growing popularity of eating organic was reflected in WhiteWave’s last quarterly report. The packaged food company posted a 34% year-over-year increase in net sales and an 11% year-over-year increase in organic sales. Looking forward, WhiteWave Foods provided guidance of $1.08 to $1.12 for adjusted diluted earnings per share for 2015. The stock last closed at $43.06, just shy of its 52-week high of $43.59.
On March 24, analyst Rupesh Parikh of Oppenheimer maintained an Outperform rating on WhiteWave Foods and raised his price target from $40 to $50. Parikh explained that since WhiteWave Foods already exceeded his $40 price target, he spent time revisiting his “investment thesis and stress-testing [his] financial model.” Based on his findings, Parikh believes “the premium valuation at which WWAV currently trades is likely to hold, driven by some of the strongest organic growth prospects in the entire CPG space, a robust pipeline of innovative products, and the company’s ability to sustain at least mid- to high teens constant currency EPS growth.”
Rupesh Parikh has rated WhiteWave Foods 5 times since September 2014, earning an 80% success rate recommending the food and beverage company with a +15% average return per WWAV recommendation. Overall, Parikh has an 85% success rate recommending stocks with a +20.1% average return per recommendation.
Separately on March 24, Argus analyst John Staszak initiated coverage on WhiteWave Foods with a Buy rating and a $46 price target. Staszak is optimistic about the future of the packaged food company and expects it to report operating earnings growth in the “high teens” over the next few years.
Overall, John Staszak has a 75% success rate recommending stocks with a +18.6% average return per recommendation.
On average, the top analyst consensus for WhiteWave Foods on TipRanks is Strong Buy.
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