Morgan Stanley analyst Megan Alexander maintained a Hold rating on Simply Good Foods today and set a price target of $24.00.
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Megan Alexander’s rating is based on a combination of factors, including the recent financial performance and market conditions surrounding Simply Good Foods. Following the company’s fourth-quarter earnings results, there was a notable decline in stock value, which has reached historically low levels. This decline reflects market skepticism about the company’s ability to recover in the second half of the fiscal year, particularly in light of challenges with the Atkins brand and concerns about the OWYN brand due to a temporary quality issue.
Despite some positive indicators, such as strong recent sales trends for the Quest brand, there are mixed signals regarding consumer engagement and long-term brand loyalty. Additionally, while management has plans to address these challenges through innovation and cost moderation, the path to recovery is expected to be uneven. Given these uncertainties and the need to rebuild investor confidence, the stock’s near-term potential appears limited, leading to the Hold rating.
In another report released yesterday, TR | OpenAI – 4o also downgraded the stock to a Hold with a $21.50 price target.