By Carly Forster
Annies Inc (NYSE:BNNY) is in a slump these days, but it doesn’t seem to be a surprise to investors.
Annies in the News
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While Annies’ stock price is up over 8% since May 8th, investors and analysts are worried.
On May 30th, Annies Inc (NYSE:BNNY) released their Q4 2014 earnings report. For the quarter, they reported adjusted diluted EPS of $0.29 versus $0.27 last year and adjusted net sales of $59.8 million for the quarter, up 16% over the prior year. For the fiscal year, Annie’s reported adjusted diluted EPS of $0.86 versus $0.78 in fiscal 2013 with adjusted net sales increasing 19%.
Annie’s CEO John Foraker said, “The Annies Inc (NYSE:BNNY) brand has never been stronger. And our growing consumer relevance and sales momentum put us at the forefront of companies in the natural and organic marketplace.” In addition, they are looking to expand into the frozen product marketplace due to the fact that “consumer trends are moving in our direction, more than ever natural organic is mainstream and we are at the center of that moment.”
While fiscal ‘14 was a year of record sales and profit for Annies Inc (NYSE:BNNY), they did not do a good job anticipating the severity of the rise in organic wheat, dairy, and other commodity prices and this has some analysts a little worried, and wondering if more trouble should be expected down the line for Annie’s.
What Does This Mean for Annies Stock?
Imperial Capital analyst Mitchell Pinheiro lowered Annies Inc (NYSE:BNNY) price target to $40.00 from $42.00 with in-line rating. During Annies’ Q4 earnings call, Pinheiro was most concerned with the competitive retail environment, their negative operating leverage due to lower volumes, as well as their de-inventorying. However, Annies’ entrance into the frozen market, with an estimated arrival of August, has potential to bringing in additional revenue for the company. Pinheiro has a +12.8% average return on all stock recommendations and a success rate of 65%.
Robert Moskow of Credit Suisse reiterated its neutral rating, but lowered its price target to $32.00 from $36.00. Maskow seemed most concerning with the difference between the Nielson data and SPINS data that Annie’s reported. Moskow has a +7.2% average return recommending Annies, and an overall average return of +2.3% of all recommendations with a 54% success rate.
Expressing concerns of his own, Kenneth Goldman of JPMorgan released a neutral rating and slashed its price target to $30 from $43. As explained in a note, ““We want to see better execution and fewer unforced errors.” Goldman has a +16.6% average return of his three Annies Inc (NYSE:BNNY) recommendations, with an overage average return of +7.2% and a 64% success rate.
Annies Inc (NYSE:BNNY) might be reporting positive earnings reports, but these top analysts agree that rising costs might prevent Annie’s from spring much more forward and have a consensus of HOLD.
Carly Forster writes about stock market news. She can be reached at [email protected]