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Credit Agricole Downgraded WhiteWave Foods to ‘Outperform’

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Price movement 

WhiteWave Foods (WWAV) has a market cap of $7.0 billion. It fell by 5.7% and closed at $39.47 per share on April 4, 2016. The price movements on a weekly, monthly, and YTD (year-to-date) basis were 0.43%, -2.7%, and 1.4%, respectively.

Currently, WhiteWave Foods is trading 1.8% below its 20-day moving average, 2.7% above its 50-day moving average, and 7.1% below its 200-day moving average.

The Fidelity MSCI Consumer Staples ETF (FSTA) invests 0.34% of its holdings in WhiteWave Foods. FSTA tracks a market-cap-weighted index of stocks in the US consumer staples sector. FSTA’s YTD price movement was 6.5% as of April 1, 2016.

The market caps of WhiteWave Foods’ competitors are as follows:

  • General Mills (GIS) – $38.9 billion
  • Mead Johnson Nutrition Company (MJN) – $16.1 billion
  • Hershey (HSY) – $14.0 billion
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Credit Agricole downgraded WhiteWave Foods

Credit Agricole downgraded WhiteWave Foods’ rating to “outperform” from “buy.”

Performance in 4Q15 and 2015

WhiteWave Foods reported fiscal 4Q15 net sales of $1,027.6 million—a rise of 12.8% compared to net sales of $911.0 million in fiscal 4Q14. Its net income and EPS (earnings per share) rose to $47.6 million and $0.26, respectively, in fiscal 4Q15—compared to $32.6 million and $0.18, respectively, in fiscal 4Q14.

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Fiscal 2015 results

In fiscal 2015, WhiteWave Foods reported net sales of $3,866.3 million—a rise of 12.5% YoY (year-over-year). Its net income and EPS rose to $168.4 million and $0.94, respectively, in fiscal 2015—compared to $140.2 million and $0.79, respectively, in fiscal 2014.

WhiteWave Foods’ cash and cash equivalents fell by 23.1% and its inventories rose by 25.5% in fiscal 2015. Its current ratio fell to 1.00x and its DE (debt-to-equity) ratio rose to 2.5x in fiscal 2015—compared to a current ratio and DE ratio of 1.04x and 2.1x, respectively, in fiscal 2014.

Projections

The company made the following projections for fiscal 1Q16 and fiscal 2016:

Fiscal 1Q16

  • net sales growth of 11%–12%
  • adjusted total operating income growth in the low-double digits
  • adjusted EPS of $0.23–$0.24

Fiscal 2016

  • net sales growth of 10%–11%
  • adjusted total operating income growth from the mid to high teens
  • adjusted EPS of $1.27–$1.31

In the next part, we’ll look at Delphi Automotive.

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