Zacks Investment Research upgraded shares of Central Garden & Pet Company (CENT) from UNDERPERFORM to NEUTRAL on April 16, 2013, with a target price of $9.25.
We are upgrading our recommendation on Central Garden to Neutral following the strategic endeavors announced by the company to return to the growth trajectory. Central Garden & Pet is focusing on streamlining its cost structure, increasing operating efficiencies to improve its margins and is concentrating on revenue growth through product innovation and marketing and brand-building initiatives. The company's long-term target is to attain growth of at least 10% in the top line, and achieve operating margins in the range of 10% to 15%. Further, Central Garden intends to transform into an integrated, multi-brand company from a portfolio of stand-alone businesses, by restructuring and reorganizing operating units and consolidating facilities. However, the discretionary spending environment continues to remain weak amid a soft employment scenario and tight credit markets. This is a looming concern for the company as a significant portion of its product portfolio consists of premium offerings.
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