Susquehanna Releases a Buy Rating on Blue BuffaloBy Jason Carr
“E-commerce already accounts for ~15% of BUFF sales compared with 4% at the end of 2015, and the company claims mid-teens share in that channel vs. 6% in the overall pet food market. With “natural” pet food sales continuing to grow high single digits overall, we think BUFF is well positioned to maintain its growth pace given its brand leadership in the “natural” segment, despite the significant channel shift (away from pet food superstores, where it is over-indexed). Because e-commerce can be a better “educational/reference” platform, we think “natural” pet food, as a segment, will over-index there over time. The Blue brand has the most space allocation at superstores (brick and mortar), and our review of e- com websites, shows Blue is prominently displayed at Chewy.com (the #1 pet food website), is well represented at other specialist sites (petco.com, petsmart.com), but has less visibility within the pet food pages of the general e-com websites (Amazon). Clearly, to maintain its leadership status, the company will need to hone in its e-commerce skills across all platforms. We are constructive in this regard, based on the company’s stature in the natural segment.”
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Blue Buffalo has an analyst consensus of Strong Buy, with a price target consensus of $28.67.
Blue Buffalo’s market cap is currently $4.69B and has a P/E ratio of 36.71. The company has a book value ratio of 32.0428.
Based on the recent corporate insider activity of 14 insiders, corporate insider sentiment is negative on the stock.
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Blue Buffalo Pet Products, Inc. is a pet food company in the United States. The company operates through its wholly-owned operating subsidiary. It engages in selling dog and cat food made with whole meats, fruits and vegetables, and other natural ingredients. The company operates pet foods into different segments: Wholesome Natural, Engineered, Private Label and Therapeutic market. Blue Buffalo Pet Products was founded by William Bishop, William W. Bishop Jr. and Christopher T. Bishop in 2002 and is headquartered in Wilton, CT.