Stephens & Co analyst Jim Salera initiated coverage on SunOpta Inc (NASDAQ:STKL) with an Overweight rating and a price target of $10.
The analyst believes the company has a unique portfolio of production assets that enables it to maintain branded and private label partners growing their offerings in the high-growth, plant-based, and fruit-based product segments.
The analyst thinks STKL’s long-term contracts help it maintain steady future FCF.
Salera sees SunOpta as able to fill the gap in the emerging categories and aid the world’s largest food and beverage companies in expanding their BetterFor-You (BFY) portfolios.
Also, the analyst believes STKL is well-positioned to capitalize on the shift to non-dairy alternatives (from dairy-based milk). Given its manufacturing expertise and vast supply chain, he sees the company as a vital partner for businesses who want to foray into the category.
Salera estimates FY23 sales of $1.03 billion (consensus: $1.02 billion), adjusted EBITDA of $101.4 million (consensus: $101.3 million), and adjusted EPS of $0.12.
For FY24, the analyst expects revenue of $1.14 billion (consensus: $1.12 billion), adjusted EBITDA of $121.5 million (consensus: $121.1 million), and adjusted EPS of $0.20.
Price Action: STKL shares are trading higher by 1.97% at $6.99 on the last check Friday.
