UPDATE: Imperial Capital Downgrades Omega Protein on Valuation

In a report published Tuesday, Imperial Capital analyst Mitchell B. Pinheiro downgraded the rating on Omega Protein Corporation OME from Outperform to In-Line, but reiterated the $15.00 price target. In the report, Imperial Capital noted, “We are lowering our rates on the shares of Omega Protein Corporation (OME) to In-Line and maintaining our $15 one-year price target. The shares of OME have increased 59% (and hit a 52-week high of $15.27 intra-day on 11/25/13) since the company released its strong 3Q13 results on 11/6/13 and now trade at 1.3x LTM revenue and 5.0x LTM EBITDA, levels that are above the high end of its normal historical range. With no visibility into the 2014 fish catch and difficult year-over-year comparison coming for fish oil yields, selling prices, and EPS, we prefer to step aside and look for a better entry point into the stock. While we continue to like OME's cash flow deployment into the potentially higher margin, faster growing and more stable, Human Nutrition segment, this business is still in a transformation stage and a minor contributor to revenue and earnings (12% of 2013 revenue).” Omega Protein closed on Monday at $14.89.
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Posted In: Analyst ColorDowngradesAnalyst Ratingsimperial capitalMitchell B. Pinheiro
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