RBC Capital Remains Confident in Natural Grocers (NGVC) Despite Increased Risk - PT to $29
RBC Capital maintained an Outperform rating on Natural Grocers (NYSE: NGVC), and cut the price target to $29.00 (from $32.00), following the company's 1Q earnings report. Natural Grocers reported comparable store sales growth of +3.6% (cons. +4.5%), $167.8m of revenue (cons. $171.5m), and $0.17 of EPS (cons. $0.17). The results were slightly below management expectations.
Analyst William Kirk commented, "We are still very confident in the long-term opportunity at Natural Grocers. However, the lower-than-expected first-half of FY16 puts increased pressure on back-half improvements. We believe a MSD comparable store sales grower with a compelling, profitable unit expansion opportunity is very attractive at ~7x EV/NTM EBITDA. With customers, Natural Grocers rates best (in our coverage) and in-line with highly revered Trader Joe's."
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Shares of Natural Grocers closed at $18.01 yesterday.