SMPL - Simply Good Foods dips after D.A. Davidson calls shares fully valued

D.A. Davidson lowers Simply Good Foods Company ([[SMPL]] -1.7%) to a Neutral rating from Buy on a call tied largely to valuation. Analyst Brian Hollard: "We think following the nearly 60% move over the past three months (S&P +15%), most notably on inclusion in the S&P Small Cap 600 and sequentially improving scanner, the stock is closer to fully valued at current levels. Further, a prolonged COVID-19 timeline could push out the long anticipated recovery in the bars category in general, and the Atkins brand in particular." Holland thinks it remains unclear whether bars can return to pre-COVID growth due to the momentum in the shakes category and a structural shift in the work from home dynamic. The firm expects 2021 adjusted EBITDA of $153.9M from SMPL vs. $179.1M consensus and arrives at a price target of $33. Simply Good Foods posted 40% revenue growth in FQ1.

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Simply Good Foods dips after D.A. Davidson calls shares fully valued