Goldman Sachs Downgrades The WhiteWave Foods (WWAV) to Sell

(Updated - October 20, 2015 8:33 AM EDT)

Goldman Sachs downgraded The WhiteWave Foods Company (NYSE: WWAV) from Neutral to Sell with a price target of $42.00 (from $48.00). Analyst Judy E. Hong sees risk to its 10% organic sales growth guidance.

"We still view WWAV as well-positioned to capitalize on secular shift towards healthier, organic and premium food and beverage offerings. That said, WWAV’s multiple and expectations remain elevated and could see compression, as we see risk to WWAV’s 10% organic sales growth guidance," said Hong.

"We now expect consolidated organic sales growth to approach 8.5% in 3Q15, 9.0% for 2015 and +8.4% in 2016, below WWAV’s 10% organic sales growth guidance for 2015. The biggest driver to this more conservative view is slowing growth for Silk (as seen in the recent Nielsen data) and continued choppy sales trend at Earthbound Farms," continued the analyst.

Hong added, "Our 2016 estimate is $0.05 below consensus: We tweak our FY15/FY16/FY17 EPS estimates to $1.14/$1.34/$1.57 and are now 3-5% below consensus. We believe a slowing sales trajectory will likely drive multiple compression from current levels at 32.5X 2016 P/E (vs. peers at 28.1X) and 16.8X 2016 EV/EBITDA (vs. peers at 15.2X)."

For an analyst ratings summary and ratings history on The WhiteWave Foods Company click here. For more ratings news on The WhiteWave Foods Company click here.

Shares of The WhiteWave Foods Company closed at $43.34 yesterday.

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