Blue Buffalo's Price Target Raised At Deutsche Bank

Deutsche Bank maintained its Buy rating and raised its price target on Blue Buffalo Pet Products Inc BUFF shares by $2 to $30 after the company's better-than-expected Q2 results and upbeat outlook.

The company reported Q2 EPS of $0.19 versus estimates of $0.17. Sales grew 12.9 percent to $287 million, topping Street view of $280.93 million.

"Rapid eCommerce penetration, increased distribution breadth in other retail specialty channels and new opportunities in vet channel and international markets should continue to drive solid organic growth," analyst Bill Schmitz wrote in a note.

Further, the margins should benefit from self manufacturing, improved mix, modest pricing, and benign commodities.

The company also raised FY16 EPS guidance to $0.74- $0.76 (from $0.73-$0.74) bracketing Street and revenue guidance by 1 percent to $1.14-$1.15 billion (+11.4 percent YoY). The analyst has also raised his FY16 EPS view by $0.01 to $0.75.

"While valuation is longer cheap, scarcity value of secular growth and likely strategic interest in this authentic asset should drive earnings upside and provide multiple support," Schmitz added.

At time of writing, shares of Blue Buffalo fell 4.69 percent to $25.58.