Analysts: WhiteWave Foods Is Worth The Premium

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WhiteWave Foods Co
WWAV
's premium stock valuation is likely to hold up with support from strong growth prospects in the market for organic groceries, an analyst said Tuesday. The company, whose brands include Silk food and beverages as well as Horizon and Land 'O Lakes, has seen its shares rise more 23 percent year-to-date. WhiteWave changed hands recently at $43.08. "Investors are having a difficult time putting new money to work" in WhiteWave shares, Oppenheimer's Rupesh Parikh said Tuesday. "But they're equally or more hesitant to reduce positions" following the shares' recent rally. Parikh reiterated an Outperform rating and raised his target 25 percent to $50. Argus' John Staszak launched coverage on WhiteWave Tuesday with a Buy rating and $46 target. While other packaged food companies, have recently seen slower growth, Staszak expects WhiteWave to post growth in operating earnings in the "high teens" over the next several years. The company last month launched a raft of brand extensions including Silk cashew milk and yogurt as well as Horizon macaroni and cheese, and cracker products. Parikh said the launches "easily surpassed our expectations" and said the products are already embraced by retailers. Parikh trimmed his 2015 earnings forecast by a penny to $1.09 a share citing foreign exchange. But the analyst said WhiteWave has strong prospects for international expansion. The company gets 85 percent of its revenue from North America, while recently gaining market share in Europe. WhiteWave recently entered China, through a joint venture with China Mengniu Dairy Co. Following the 2014 acquisitions of So Delicious Dairy Free and Earthbound Farms, WhiteWave has $1 billion available for further buys through a revolving line of credit.
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Posted In: Analyst ColorPrice TargetInitiationReiterationAnalyst RatingsOppenheimerRupesh Parikh
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