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News Breaks | | | | October 21, 2012 | | 20:50 EDT |  | BNNY | Annie's stock could fall 30% plus, if earnings growth falters, Barron's says
Annie's (BNNY) valuation looks rich as it will be tough to expand beyond its key categories. Additionally, the organic and natural-foods market is crowded with large players. Analysts have set a high bar for Annie's, with expectations that FY14 earnings will grow 25%. According to data from SymphonyIRI Group, Annie's sales growth may be slowing. At 55x FY13, Annie's is the most richly valued stock in the food sector. Put a generous multiple of 30x on next year's projected profits, and the stock would trade about $30 -- compared to recent trade at $45.50. Annie's could become a takeover target for a large food company, but that scenario already seems discounted in the richly valued shares. Reference Link | |
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