Share price will recover, analysts say

Things will soon start looking up for people who bought shares in My Food Bag, analysts say. The meal kit delivery company listed on the stock exchange last month, in what was described as the biggest listing in seven years. Many My Food Bag customers took up the offer of a priority allocation of shares, for the list price of $1.85 each. But the share price has disappointed since listing, dropping to $1.52 in late March and closing at $1.61 on Monday. Someone who bought the minimum allocation of 270 shares worth $499.50 at list would now find they are worth $434.70. But investment advisers Forsyth Bar said the company would likely outperform over the coming months and would probably be back at $1.85 in a year’s time and deliver a 12-month return of 19.8 per cent. ‘‘We are attracted to its strong cash generation, demographic trends towards convenience and online product offerings, future growth opportunities available through leveraging its brand equity into adjacent markets, and trading at a -24 per cent discount to the market we view current valuation as attractive,’’ the company’s analysts said in a report. They said My Food Bag was already the biggest food retailer in the country, behind the supermarkets, but there was scope for the company to offer additional meals to broaden its potential customer base. Forsyth Barr said My Food Bag’s meal kits were priced 15 per cent higher than the same items bought from a supermarket but that premium was warranted because of the convenience, product quality and recipes. Jarden analysts also predict better times ahead for shareholders, with a target price of $1.90.