Torrance coffee roasting company Farmer Bros. Co.’s shares had investors and an analyst buzzing this week.
Farmer Bros. stock rose 6 percent on the week to close at $19.40 on Nov. 20, placing it among the biggest gainers on the LABJ Stock Index. (See page 60.)
The bounce came on the heels of a first quarter report, for the period ended Sept. 30, in which the company reported net income of $1.8 million (11 cents per share), down almost 40 percent (19 cents) from the same period a year earlier. Net sales for the Torrance company rose almost 8 percent to about $129 million.
That report came on the heels of a bitter period in which Farmer Bros. announced it would restate its financials for the past three years to correct errors related to postretirement obligations and faced delisting by the Nasdaq for failure to submit statements on time.
Still, Anton Brenner, an analyst with Newport Beach investment banking firm Roth Capital Partners, wrote in a Nov. 20 report that Farmer Bros. was in the early stages of a turnaround and rated the company a “buy.”
Some of that growth could come from Farmer Bros.’ newer accounts, including large clients like Target Corp.’s Canadian stores, McDonalds Corp. and Einstein Noah Restaurant Group Inc. Brenner’s report said the coffee company could obtain more large clients as restaurants upgrade their coffee selection to avoid losing market share to the likes of chains like Starbucks Corp.
“We look for sustained double-digit volume growth over the next several years as new accounts are added,” Brenner wrote.
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