Is Annie's (BNNY) Priced for Perfection?
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Shares of Annie's (NYSE: BNNY) are trading lower early on Monday after Barron’s this weekend said "valuation looks rich". The report pointed out the stock's high price earnings/earnings ratio, calling it the highest in the food sector.
"Annie's valuation looks rich because it will be tough for Annie's to expand beyond its key categories, which include cookies, crackers, and fruit snacks," said Barron's.
The report noted that it is now valued at $801 million, or about five times estimated current-year sales. Most large food companies are valued at about 1.5 times annual sales.
However, Annie's could eventually find it is the target of a takeover. If so, Barron’s thinks a takeover is already priced it.
Shares of Annie's last traded at $42.19, down 3.3 percent.
"Annie's valuation looks rich because it will be tough for Annie's to expand beyond its key categories, which include cookies, crackers, and fruit snacks," said Barron's.
The report noted that it is now valued at $801 million, or about five times estimated current-year sales. Most large food companies are valued at about 1.5 times annual sales.
However, Annie's could eventually find it is the target of a takeover. If so, Barron’s thinks a takeover is already priced it.
Shares of Annie's last traded at $42.19, down 3.3 percent.
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