Kaumil Gajrawala, an analyst from Jefferies, maintained the Buy rating on Vita Coco Company (COCO – Research Report). The associated price target is $43.00.
Kaumil Gajrawala’s rating is based on several positive developments for Vita Coco Company. The company is poised to benefit from improved freight rates and increased capacity, which are expected to set a strong foundation for 2025. Despite current margin pressures due to high-cost inventory, the anticipated strong demand should facilitate a swift recovery. Inventory levels are improving, with shipments starting to recover and meet consumer demand, which is expected to continue into 2025.
Additionally, the consumption of coconut water is growing robustly, with Vita Coco maintaining its leadership position in the category. The company’s innovations, such as expanding multi-pack options, are contributing to this growth. Although gross margin pressures may persist into 2025, the company is expected to recover quickly as rates normalize, supported by volume leverage, improved pricing, and supply efficiencies. These factors collectively underpin the Buy rating with a price target of $43.
Based on the recent corporate insider activity of 104 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of COCO in relation to earlier this year.