NEW YORK (TheStreet) -- Shares of WhiteWave Foods Co. (WWAV) are climbing 1.04% to $47.71 in mid-day trading on Monday after Credit Suisse analysts assumed coverage of the company with an "outperform" rating and raised their price target to $52 from $42.
"Our target price is based on a 40x P/E multiple against our forward 12-month EPS estimate, which is a 21% premium to WhiteWave's peer group of high-growth consumer stocks," analysts said.
However, Credit Suisse added several risks to their price target, citing vulnerability to supplies of organic milk and other organic products, acquisition risk, potential for intensified competition from Nestle (NSRGY) in the creamer category, and exposure to some of Europe's more challenged markets.
WhiteWave Foods, headquartered in Denver, is a consumer packaged foods and beverage company that manufactures, markets, distributes, and sells branded plant-based foods and beverages throughout North America and Europe. Some of their popular subsidiaries are Horizon Organic, Silk, and International Delight.
TheStreet Ratings team rates WHITEWAVE FOODS CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHITEWAVE FOODS CO (WWAV) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WHITEWAVE FOODS CO has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WHITEWAVE FOODS CO increased its bottom line by earning $0.78 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.78).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food Products industry average. The net income increased by 3.0% when compared to the same quarter one year prior, going from $32.36 million to $33.35 million.
- 36.89% is the gross profit margin for WHITEWAVE FOODS CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.65% trails the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 53.65% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: WWAV Ratings Report