Analysts Offer Insights on Consumer Goods Companies: Acacia Communications (NASDAQ: ACIA) and Blue Buffalo (NASDAQ: BUFF)

By Austin Angelo

There’s a lot to be optimistic about in the Consumer Goods sector as 2 analysts just weighed in on Acacia Communications (NASDAQ: ACIA) and Blue Buffalo (NASDAQ: BUFF) with bullish sentiments.

Acacia Communications (NASDAQ: ACIA)

In a report released today, Alex Henderson from Needham reiterated a Buy rating on Acacia Communications (NASDAQ: ACIA), with a price target of $125. The company’s shares closed yesterday at $71.68.

Henderson noted:

“Acacia sharply beat the original CY3Q estimates and guided substantially above the original 4Q estimates which were in place before they positively pre-released. Even after the increase in the estimates post the positive pre- release the actual results and guide were still better than the raised Street estimates. Acacia said all the right things on the call and offered guidance with plenty of room for further upside on the CY4Q print in February. Despite increasing our estimates a bunch on the positive pre-release, we again increase estimates on the print and guide. We reiterate our Buy rating and $125 Target Price.”

According to TipRanks.com, Henderson is a 5-star analyst with an average return of 8.3% and a 51.3% success rate. Henderson covers the Technology sector, focusing on stocks such as Riverbed Technology, Ceragon Networks, and Extreme Networks.

Currently, the analyst consensus on Acacia Communications is Strong Buy and the average price target is $118, representing a 64.6% upside.

In a report issued on October 31, William Blair also initiated coverage with a Buy rating on the stock.
Blue Buffalo (NASDAQ: BUFF)

In a report released today, Pablo Zuanic from Susquehanna reiterated a Buy rating on Blue Buffalo (NASDAQ: BUFF), with a price target of $29. The company’s shares closed yesterday at $23.86.

Zuanic wrote:

“BUFF beat EPS by 2c and increased guidance (both on gross margins). Sales growth of 11% was one point below consensus; the midpoint of FY16 sales guidance implies full-year growth of 11.4% (although it also implies a wide 4Q growth range of 7-11%), and as we as explain here another year of 10% growth should be in store for 2017. The company is gaining share of pet food (although our math makes us think they are not gaining in “natural”), and has various levers to sustain double-digit top-line growth: riding “natural,” expanding into wet foods and treats, expanding into parts of specialty where it is under- indexed, and entering new segments (Therapeutics, International). After four years, CEO Kurt Schmidt will be leaving the company and Billy Bishop (of the founding family) will take over. As with the three secondary placements, it might have helped sentiment if this had been telegraphed better before. Anyhow, BUFF is a growth stock and we see little reason to expect a slowdown for now, so we keep the Positive stance. Taking a 30% peer premium on our apples-to-apples methodology, we get to a $29 share price by December ’17. Aboutthe quarter . EPS of 22c was ahead of consensus mainly due to higher than expected gross margins (46.3% vs. 44.4% consensus, and up 460bp yoy), while sales were 1% below (up 11% vs. 12% estimates). The effect of a lower tax rate (33.6% vs. 36.7% was offset by a higher diluted share count of 203.2M vs. 198M).”

According to TipRanks.com, Zuanic is a 3-star analyst with an average return of 1.8% and a 51.9% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Constellation Brands Inc, Anheuser-Busch Inbev Sa, and Mondelez International.

Currently, the analyst consensus on Blue Buffalo is Strong Buy and the average price target is $29, representing a 21.5% upside.

In a report issued on November 7, D.A. Davidson also reiterated a Buy rating on the stock with a $29 price target.