Canaccord Genuity Starts Central Garden & Pet Co. (CENT) at Buy, 'Organic Growth & Robust Market Share'

Canaccord Genuity analyst Brian McNamara initiates coverage on Central Garden & Pet Co. (NASDAQ: CENT) with a Buy rating and a price target of $52.00.

The analyst comments "We are initiating coverage of Central Garden & Pet (CENT) with a BUY rating and $52 price target. Founded in 1980 as a distribution company by Chairman Mr. Bill Brown, CENT has since grown both organically and through M&A into a portfolio of leading brands in the lawn, garden, and pet supplies industries. CENT competes in the ~$144bn pet industry and is the #2 player in pet food and supplies, excluding dog and cat food and cat litter, which are areas the company has purposefully chosen not to participate in, given the competitive dynamics and the presence of large multinationals. Similarly, the company holds the #2 share in the ~$33bn lawn and garden consumables market, behind Scotts Miracle-Gro. CENT has several leadership brands, ranging from a #1 share position with its Kaytee brand in both pet bird and small animal; a #2 position in dog toys with its Nylabone brand; a #1 position in wild bird with Pennington, which also has the #2 position in grass seed; and in fertilizer, it has a strong position, thanks to its Pennington brand and select private label partnerships. In addition, it has strength in controls with its Amdro and Sevin brands. While the pandemic, its aftereffects, unfavorable weather and pet ownership dynamics have created noise in the results over the past few years, we expect the company to return to more predictable growth, expand margins — which we believe have been managed quite well through the recent period of stubborn inflation — and continue to gain share in its attractive markets both organically and through M&A."

For an analyst ratings summary and ratings history on Central Garden & Pet Co. click here. For more ratings news on Central Garden & Pet Co. click here.

Shares of Central Garden & Pet Co. closed at $41.24 yesterday.

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