In a report released today, Kevin Grundy from Jefferies upgraded Cott Corp (NYSE: COT) to Buy, with a price target of $20. The company’s shares closed yesterday at $15.78.
Grundy commented:
“We upgrade a strong 1Q. Cott’s transformation to a more stable and higher growth/margin pure play water / coffee co. is still not fully appreciated by the market, in our view. At 10x EV/EBITDA, COT trades at > 20% disc. to biz. service peers, leaving adequate scope to re-rate. Our upwardly revised $20 PT (11x EV/EBITDA) may prove to be conservative vs. peers ~12.5x avg. and value accretive tuck-in M&A (~$1.50/share) likely. Not the “Old Cott” – transformation under-appreciated: Following a number of acquisitions and sale of its legacy private label CSD/juice biz (closed 1/30), COT has been transformed into a significantly more stable and profitable pure-play home/office delivery (HOD) water/coffee/tea services co.”
According to TipRanks.com, Grundy is a 4-star analyst with an average return of 6.8% and a 58.3% success rate. Grundy covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Edgewell Personal Care, and Monster Beverage Corp.
Cott Corp has an analyst consensus of Moderate Buy, with a price target consensus of $17.83.
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Based on Cott Corp’s latest earnings release for the quarter ending March 31, the company reported a quarterly net profit of $361 million. In comparison, last year the company had a GAAP net loss of $36.4 million.
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Cott Corp. (Canada) engages in the manufacture, process, and distribution of beverages. It operates through the following business segments: Route Based Srevices; Coffee, Tea, and Extract Solutions; and All Other. The Route Based Srevices segment includes Aquaterra and Eden businesses.
