JPMorgan Raises Price Target On WhiteWave Foods

WhiteWave Foods Co (NYSE: WWAV) reported 1Q16 earnings of $0.28 and raised its full year guidance.

JPMorgan’s Ken Goldman maintained an Overweight rating on the company, while raising the price target from $41 to $48, saying the guidance raise hinted at improving trends.

Goldman believes that WhiteWave Foods is one of the “last true growth stories in packaged food/beverages.”

Plant-Based Beverages Doing Well

While the Neilsen data indicated a meaningful share loss for WhiteWave Foods’ Silk brand, the brand, along with other plant-based brands of the company, is actually doing well in Canada, Latin America and non-measured U.S. channels, Goldman noted.

“Based on what we heard during the earnings call, it seems as though PBB will remain sluggish in measured channels for a few more months and then potentially pick up steam toward the end of the year (as the cashew milk launch gets more fully lapped),” the JPMorgan report added.

Potential For Larger Merger in LatAm

Goldman believes WhiteWave Foods’ management seems to be downplaying the potential for larger M&A in Latin America.

The analyst quoted the company’s CEO Gregg Engles as saying, “I don't think you should expect to see any sort of big-bang moves in Latin America in terms of M&A in order to jumpstart what we are doing down there because I think we have got a good plot.”

The company also mentioned that Earthbound’s turnaround may be slower than anticipated.

The EPS estimates for 2016 and 2017 have been raised from $1.35 to $1.41 and from $1.55 to $1.61, respectively.