Oppenheimer Remains Sidelined on Central Garden & Pet (CENT) After Meeting with Management
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Oppenheimer reiterated a Perform rating on Central Garden & Pet Co. (NASDAQ: CENT) after meeting with management at the company's annual Garden Dealer Exhibition Show in Las Vegas, NV.
Analyst Brian Nagel commented, "We walked away from our meetings with Mr. Roeth and other senior leaders at CENT more encouraged with the strategic positioning and direction of the company. CENT is simultaneously focused on further tightening expense controls and driving better innovation within its Pet and Garden segments. Our analysis increasingly suggests to us that there exists a potentially significant infrastructure rationalization opportunity at the company that could over time, fuel improved operating margins and free up capital for stepped-up investment spending. In our CENT model, we currently forecast operating margins of less than 7% in FY16 (Sep.). Management indicates that it plans to discuss in more detail guidance and longer term financial targets when it reports FY16 results in Oct. We keep our Perform rating for now as we further work to understand the intricacies of the CENT business model and the sector in which the company operates."
Shares of Central Garden & Pet Co. closed at $25.74 yesterday.
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