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Susquehanna sees logic in the General Mills-Blue Buffalo deal

Published 02/26/2018, 10:43 AM
© Reuters.  Susquehanna sees logic in the General Mills-Blue Buffalo deal
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  • Susquehanna analyst Pablo Zuanic asks what's wrong with a slow-growing consumer packaged good company taking on a deal that make financial sense and has upside?
  • In particular, Zuanic notes that Blue Buffalo Pet Products (BUFF -0.1%) has only tapped about 20% of the food/drug/mass retailer opportunity for premium pet food through the launch at four chains last year. "We think GIS may better equipped than BUFF on its own to accelerate that rollout," reasons Zuanic.
  • Susquehanna keeps a Neutral rating on General Mills (GIS -1.9%), with most of the post-deal EPS accretion not slated to arrive until FY20. The firm's price target on the food stock is $61 vs. a current trading price of $52.03.
  • Now read: General Mills Acquires Blue Buffalo: Buying Growth


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