Home / Finance / Barclays sees Blue Apron rebounding more than 20%, looks like a ‘stabilization point’

Barclays sees Blue Apron rebounding more than 20%, looks like a ‘stabilization point’


The Blue Apron logo appears above a trading post on the floor of the New York Stock Exchange, July 18, 2017.

Richard Drew | AP

The Blue Apron logo appears above a trading post on the floor of the New York Stock Exchange, July 18, 2017.

Blue Apron could be reaching a “stabilization point” given its stock’s disappointing performance since its last earnings report, according to Barclays.

Shares of the company have fallen off roughly 15 percent since its November earnings call and they may have finally bottomed out, according to analyst Ross Sandler, who upgraded the stock to equal weight from underweight. The analyst also cited new CEO Brad Dickerson as a solid leadership choice going forward.

“The promotion of Brad Dickerson to CEO is positive, in our view, given his experience and operational background,” wrote Sandler on Monday. “Blue Apron mentioned in the press release that: 1) On-time, in-full rates in the Linden facility are at parity with the other warehouses (vs “well below 1 standard deviation” just four weeks back) and 2) margins are up significantly from third-quarter level in the fourth quarter.”

Shares of Blue Apron were up nearly 7 percent in premarket trading following the Barclays call. The stock closed Friday at $3.23, far below its $10 IPO price just a few months ago. Sandler’s price target of $4 represents 24 percent upside from last week’s close.

To be sure, Sandler isn’t ready to issue an overweight rating on the young home cooking company; growing competition may prove a thorn in Blue Apron’s side, even if it gets its own operations in order. Germany-based Hellofresh – which also provides pre-portioned ingredients to home cooking subscribers – is starting to encroach on Blue Apron’s turf, the analyst noted.

“HelloFresh continues to take market share in the U.S. with FX-neutral growth of 86 percent year over year in the region,” added Sandler. “HelloFresh seems to be filling the void left behind from Blue Apron’s marketing reductions.”

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