Blue Apron's CEO Change Could Be A Recipe For Stabilization; Barclays Upgrades

A leadership change is taking place at Blue Apron Holdings Inc APRN: Co-founder Matt Salzberg is stepping down as CEO and will be replaced with CFO Brad Dickerson. Salzberg will continue serving as executive chairman.

The Analyst

Barclays' Ross Sandler upgraded Blue Apron's stock rating from Underweight to Equal Weight and raised the price target raised from $3 to $4.

The Thesis

Dickerson may be better suited to serve as CEO given his experience and operational background, Sandler said in a research report. (See Sandler's track record here.) 

But perhaps more important, the company highlighted in its press release that:

Its On-Time-In-Full rates rates in the recently completed Linden, NJ facility are now at parity with other Blue Apron warehouses ,as opposed to "well below one standard deviation" four weeks ago,.

The company's margins are up notably from the third quarter.

Negative growth remains a concern for the company due to a step back in marketing spend and elevated churn, according to Barclays.

The competitive environment remains fierce, with HelloFresh "filling the void" from Blue Apron's marketing reduction, Sandler said. 

Even if Blue Apron is able to get "back on track in 2018," the competitiven environment will remain just as fierce, especially if Amazon and food retailers ramp their own efforts in meal kits, he said. 

Price Action

Shares of Blue Apron soared higher by more than 20 percent Monday morning but are still down more than 60 percent since the meal kit company's IPO.

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Photo courtesy of Blue Apron.