Central Garden & Pet (CENT)
by Zacks Equity ResearchMarch 15, 2011 | Comments : 0 Recommended this article: (0)
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It is to be noted that the company has historically reported losses in its first quarter due to the cyclic nature of the lawn and garden category. The company also witnessed a 5.4% drop in the gross profit with gross margin contracting 310 basis points primarily due to rising commodity prices along with the change in the product mix.
Central Garden & Pet is trading at a discount to its peer group, based on forward earnings estimates. We have a long-term Underperform recommendation on the stock. Our target price of $8.25, 9.5X 2011 EPS, reflects this view.
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