Truist Financial analyst Jake Bartlett maintained a Buy rating on Karat Packaging Inc (KRT – Research Report) yesterday and set a price target of $24.00.
Jake Bartlett’s Buy rating on Karat Packaging Inc (KRT) is influenced by a combination of factors.
Primarily, the rating is driven by the company’s robust sales volume growth, which continues to accelerate despite a challenging pricing environment. Lower prices have been offset by the rising sales volume, a trend Bartlett predicts may proceed into the next financial year. This growth is backed by increased warehouse capacity, an expanded sales team, new product lines and the addition of smaller satellite warehouses. Bartlett also takes into account the company’s impressive gross margin (GM) expansion, which has been driven by significantly lower ocean freight costs and a strategic shift away from manufacturing.
In his report, Bartlett also highlights KRT’s strong free cash flow (FCF) and its attractive valuation, emphasized by the company’s increased dividend yield. The company’s transition to a more asset-light model and consistent strong FCF generation has facilitated an increased return of cash to shareholders. Bartlett has also factored in the decline in KRT’s sales guidance, which is expected due to continued pricing pressure and market softness, particularly in California. Nevertheless, Bartlett believes in the company’s potential for revenue growth given the robust volume growth and strategic initiatives being undertaken.
According to TipRanks, Bartlett is a 5-star analyst with an average return of 15.6% and a 59.18% success rate. Bartlett covers the Consumer Cyclical sector, focusing on stocks such as Texas Roadhouse, Wendy’s, and Shake Shack.
In another report released yesterday, Lake Street also assigned a Buy rating to the stock with a $26.00 price target.
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Karat Packaging Inc (KRT) Company Description:
Karat Packaging Inc is engaged in the manufacturing and distribution of disposable products used in restaurants and food service settings. It offers products for the foodservice industry, including food packaging, containers, tableware, cups, lids, cutlery, and straws. These products are available in plastic, paper, biopolymer-based and other compostable forms.
Read More on KRT:
- Karat Packaging Reports 2023 Third Quarter Financial Results
- Karat Packaging increases quarterly dividend 10c to 20c per share
- Karat Packaging Board Declares Increase in Quarterly Cash Dividend
- Karat Packaging Expands National Salesforce, Focusing on Greater Penetration in East Coast and Mid-West Regions
