Goldman Steps Up As First Underwriter To Give Blue Apron A 'Buy' Rating

After conducting one of the most disastrous high-profile initial public offerings in recent history, Blue Apron Holdings Inc APRN shares are finally getting a major boost on Monday after IPO underwriter Goldman Sachs stepped in with bullish commentary and a Buy rating for the stock.

Within days of Blue Apron’s June 29 IPO, Amazon.com, Inc. AMZN reported a buyout of grocery stock Whole Foods Market, Inc. WFM. With a massive new competitor in Blue Apron’s market, shares tanked from their IPO price of $10 to as low as $6.23 by July 18. However, Blue Apron shares are skyrocketing by more than 15 percent on Monday after Goldman and other IPO underwriters commented on the stock publicly for the first time.

"We see this hyper-competition as the primary source of Blue Apron's rising costs and slowing growth and an eventual key to both improving," Goldman analyst Heath Terry wrote on Monday.

The mandatory quiet period for Blue Apron IPO underwriters expired on Monday, leaving the underwriters fee to publicly defend the stock for the first time. Angry IPO buyers who were already down 30 percent or more were likely eagerly anticipating the first commentary from underwriters since the disastrous IPO.

Goldman initiated coverage with a Buy rating and an $11 price target.

RBC Capital and Oppenheimer also initiated coverage with Outperform ratings and price targets of $10 and $11, respectively.

Underwriters Morgan Stanley and Barclays weren’t quite so optimistic. The firms set Equal-Weight ratings with price targets of $7.50 and $7.00, respectively.

Related Link: Blue Apron Jumps To The Top Of Short-Seller Favorites List

Even after Monday’s big move, Blue Apron shares will still trading roughly 25 percent below their IPO price.

But before Blue Apron investors get too bullish about Monday’s big move, there are market factors to consider. Short covering may be playing a large role in the explosive move. In its most recent weekly short selling report, FIS Astec Analytics reported that Blue Apron was the most popular stock among short sellers with 100 percent o available shares held short as of mid-July.

At last check, shares of Blue Apron were up 16.95 percent at $7.66.

Joel Elconin contributed to this story.