Central Garden Upped to Neutral - Analyst Blog

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On Apr 16, we upgraded consumer goods company, Central Garden & Pet Company ( CENT ) to Neutral based on improved prospects owing to its strategic initiatives. Central Garden, which focuses on lawn & garden and pet products, carries a Zacks Rank #3 (Hold).

Why the Upgrade?

Central Garden & Pet's primary focus is on streamlining its cost structure, increasing operating efficiencies in order to improve its margins and concentrating on revenue growth through 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% - 15%. The company also targets $40 million in cumulative cost savings as it exits fiscal 2013.


Alongside, being the leading producer of garden and pet supplies products in the U.S. and with a diversified portfolio of brands, Central Garden & Pet developed a healthy commercial relationship with giant retailers, such as Wal-Mart Stores Inc . ( WMT ) and The Home Depot, Inc . ( HD ). This provides a significant upside potential for the company.

However, the discretionary spending environment continues to remain sluggish amid high unemployment levels and tight credit markets. This is a looming concern for the company as a significant portion of its product portfolio consists of premium offerings.

Other Stock to Consider

Besides Central Garden, the other stock in the consumer goods sector worth considering includes Jarden Corp . ( JAH ), which holds a Zacks Rank #1 (Strong Buy) and is expected to continue with its upbeat performance.



CENTRAL GARDEN (CENT): Free Stock Analysis Report

HOME DEPOT (HD): Free Stock Analysis Report

JARDEN CORP (JAH): Free Stock Analysis Report

WAL-MART STORES (WMT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CENT , HD , JAH , WMT

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