Share of Blue Apron Holdings Inc. dropped 1.7% in premarket trade Friday, after the meal-kit delivery company was downgraded at Stifel Nicolaus, citing challenges with the transition of order volume to a new fulfillment center in New Jersey and with broader product expansion. Analyst Scott Devitt cut the rating to hold from buy, and slashed his stock price target to $6 from $8. The new target is 40% below the initial public offering price of $10. Stifel Nicolaus was one of the underwriters of the IPO. Devitt said the downgrade comes after a further review of second-quarter results. “The company is currently grappling with unexpected challenges in transitioning its East Coast fulfillment center to a new Linden, N.J. center while at the same time dealing with lower fulfillment efficiency/accuracy stemming from its recent product expansion (more menu options and greater menu flexibility),” Devitt wrote in a note to clients. The stock has plunged 46% through Thursday, since it closed at its IPO price on the first day of trade on June 29, while the S&P 500 has gained 0.4% over the same time.
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