Relief Rally: Barclays Weighs In On WhiteWave Foods

WhiteWave Foods Co WWAV rallied 7 percent on Tuesday, following the announcement of the 1Q16 results, which included 8 percent year-on-year organic sales growth.

Barclays’ Andrew Lazar maintained an Overweight rating on the company, while raising the price target from $45 to $51.

Relief Rally

“Although WWAV shares had rebounded somewhat heading into 1Q16 results, we believe some investors continued to harbor concerns over the company’s ability to hit its +HSD YOY organic growth goal for the full year,” Lazar mentioned.

This is especially true, given that the underlying scanner trends, ex-Earthbound, while being robust, have recently seen modest deceleration.

The analyst pointed out that the rally in the stock following 1Q16 results announcement was a “relief rally.”

Despite the expected headwind at Earthbound, WhiteWave Foods reported overall organic sales growth of 8 percent.

“We see this performance as improving visibility to WWAV’s full-year organic sales target,” Lazar stated, while adding that the high end of the company’s +HSD year on year target might not be out of reach.

The company witnessed especially robust performance in the Americas, “with +HSD YOY organic growth in each of plant-based beverages, premium dairy, and coffee creamers & beverages.”

Lazar believes “investors are increasingly giving WWAV more credit for the sustainability of its non-measured channel opportunity.”