In a report released today, Megan Alexander from Morgan Stanley maintained a Hold rating on Simply Good Foods (SMPL – Research Report), with a price target of $37.00.
Megan Alexander’s rating is based on a combination of factors that reflect both positive and cautious elements regarding Simply Good Foods. The company’s recent performance showed a strong EBITDA beat, primarily due to better-than-expected gross margins. However, this was partly due to timing, and the full-year guidance remains unchanged, which suggests some caution. Despite the positive momentum from Quest and OWYN, there are concerns about weaker-than-expected performance in the Atkins segment and potential macroeconomic impacts such as tariffs affecting consumer demand.
Megan Alexander has slightly increased the price target for Simply Good Foods, reflecting improved topline visibility driven by Quest and OWYN’s growth. However, the valuation remains compelling, and the risk/reward scenario appears balanced with significant potential upside and downside. The low visibility in the Atkins segment and the balanced risk/reward profile contribute to the Hold rating, indicating that while there are favorable aspects, there are also uncertainties that warrant a cautious approach.
In another report released today, TD Cowen also reiterated a Hold rating on the stock with a $36.00 price target.