Market Conditions

Blue Apron Shares Surge After Buy Rating

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In Wall Street news, shares of Blue Apron Holdings, Inc., ARPN.N, jumped as much as 20 percent on Monday after several brokerages started coverage of the popular meal kit service with “buy” ratings.

Reuters reported news that while there has been concern over what Amazon’s $13.7 billion deal to buy Whole Foods would mean for the fast-growing meal kit industry, Wall Street analysts at three brokerages (RBC Capital Markets, Canaccord Genuity and SunTrust Robinson Humphrey) started coverage with “buy” ratings, which helped boost shares that had fallen 11 percent last week after Amazon filed for a trademark for a possible rival service.

Blue Apron shares were last up 12 percent at $7.35 — still well below their $10 initial public offering (IPO) price. Blue Apron stocks hit a low of $6.23 last week. Its rebound on Monday caused a rush of activity, with about 19,000 Blue Apron options contracts changing hands by 1:45pm (EST), making it the busiest day for the options since they listed two weeks ago.

“We believe Blue Apron is addressing a large multi-billion dollar market that is nearly all offline and taking spend away from both traditional grocers and restaurants (takeaway and dining in),” wrote RBC’s Mark Mahaney in a research note. “Further, based on our work, Blue Apron appears to be the clear leader in the U.S. market and is providing customers with a strong value proposition, particularly as it relates to ‘convenience’ and ‘variety.’”

RBC initiated coverage of the company with a “market outperform” rating and a $10 price target, while Canaccord Genuity analyst Michael Graham gave a “buy” rating and a price target of $14.

SunTrust also gave Blue Apron stocks a “buy” rating with a $12 price target, and Morgan Stanley initiated coverage with an “equal” rating and a price target of $7.50. Barclays gave an “equal weight” rating with a $7 price target.

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