Imperial Capital Reiterates Outperform, Lowers PT On SunOpta On 4Q14 Earnings Update

In a report published Wednesday, Imperial Capital analyst Mitchell B. Pinheiro reiterated an Outperform rating on

, but lowered the price target from $16.00 to $15.00. In the report, Imperial Capital noted, "We are maintaining our Outperform rating and lowering our one-year price target to $15 from $16 on STKL shares. Our price target is roughly 55% above the recent share price. On 3/2/15, STKL reported 4Q14 results, which were hurt by self-inflicted wounds and some outside factors, including aseptic equipment breakdowns, frozen fruit cost increases without price increases, and the loss of Target in Canada. Management appropriately extended its 8% EBIT margin target to achievement in 2017 from 2016 and lowered the Consumer Product segment margins (now 11-13%, from 12-14%) and the Global Ingredients (now 6-8% from 4-5%). Our model assumes an EBIT margin of just 5.3% in 2017 suggesting meaningful upside if the company gets near its goals. While the company seems to be making progress, we believe management needs to prove it has a better handle on the business, both operationally and with predictability it can express to investors. Nevertheless, we continue to expect EPS growth of 20% over the next three years (2017), driven by volume growth, supported by the strength in the natural and organic channel, and revenue mix-driven margin improvement associated with the faster growth of the higher value-added consumer sales channels." SunOpta closed on Tuesday at $9.70.