JPMorgan Defends WhiteWave Following Bearish Voyant Note; Stock Rebounds Slightly
WhiteWave Foods Co (NYSE: WWAV) shares have slumped more than 5.4 percent in Friday’s session following a negative earnings preview by Voyant. However, JPMorgan believes that the selloff is an overreaction and doesn’t see anything newsworthy in Voyant’s preview.
“We have seen the note and, in our view, there is nothing in it that should concern investors,” a JPMorgan analyst said in defense of WhiteWave.
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Voyant listed a bearish combination of a weakening plant-based beverage category, headwinds from the California drought, the closing of a number of Wal-Mart Stores, Inc. (NYSE: WMT) locations and high capex as reasons why WhiteWave will fall short of earnings expectations.
JPMorgan's Rebuttal
JPMorgan disagrees with a number of Voyant’s bearish points and argued that the plant-based beverage business is booming, the California drought has become much less severe in recent months, Wal-Mart accounted for less than 15 percent of WhiteWave’s revenue in 2015 and the company’s spending is perfectly reasonable for a growth company at its current stage.
“We do not view any of these points as new (and in some cases we disagree with them),” the JPMorgan analyst concluded.
The firm sees the dip in WhiteWave’s stock as a buying opportunity for investors.
At the time of this publication, WhiteWave had rebounded slightly, down 3.42 percent on the day and trading at $37.31.
Disclosure: The author holds no position in the stocks mentioned.
Image Credit: Public Domain
Latest Ratings for WWAV
Jan 2016 | Barclays | Upgrades | Equal-weight | Overweight |
Jan 2016 | Deutsche Bank | Maintains | Buy | |
Jan 2016 | Goldman Sachs | Upgrades | Sell | Neutral |
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