UPDATE: Imperial Capital Initiates Coverage on Boulder Brands with Outperform Rating, $16 PT Following Glutino/Udi's Acquisitions

In a report published Friday, Imperial Capital analyst Mitchell B. Pinheiro initiated coverage on Boulder Brands BDBD with an Outperform rating and $16.00 price target. In the report, Imperial Capital noted, “We are initiating coverage of Boulder Brands, Inc. (BDBD) with an Outperform rating and a one-year price target of $16, about 56% above the recent closing price of the shares. Through the acquisition of Glutino and Udi's, BDBD has transformed into a leading natural foods manufacturer with a significant leadership position in the gluten-free segment. BDBD's legacy Smart Balance brand is being managed to provide stable cash flow to support the investment behind the natural segment and we anticipate less earnings risk from this segment, particularly with the milk business being deemphasized. Driven by distribution gains from new and existing retailers, innovative new products and continued consumer demand, we believe the natural segment can increase revenue at a mid-teen rate, at a minimum, over the next several years. We forecast a three-year revenue of 10% and EPS CAGR of 33%, placing the company among the fastest growing in the packaged food category. With an improved growth profile and reasonable street expectations, we believe the stock's current valuation reflects an attractive entry point into the best play on gluten-free and more broadly, the health and wellness category.” Boulder Brands closed on Thursday at $10.26.