Mama's Creation attracts a bull rating from Stephens

Stephens launched ratings coverage on Mama's Creations with an Overweight rating and $19 PT.

Analyst Jim Salera noted that the company has evolved from being a single-brand meatball company into a scaled deli solutions platform, with three manufacturing facilities and a portfolio spanning beef, chicken, salads, olives, and sides. "We believe the growth algorithm has shifted from promotion-led spikes to recurring base volume, driven by item expansion at existing customers, new door additions, and a promotional ladder that converts events into permanent shelf space," highlighted Salera.

Interestingly, the firm's analysis of the food-away-from-home vs. food-at-home inflation spread reinforces that the restaurant-to-grocery trade-down supporting the category has persisted through both inflationary and disinflationary periods. Salera also observed that Mama's Creation MAMA has ~$133M of pro forma net cash to fund a repeatable M&A playbook in a category with motivated sellers after the company's equity raise earlier this year,

Stephens assigned a price target of $19 to Mama's Creations MAMA to represent more than 40% upside potential.

Shares of Mama's Creations MAMA were up 2.1% to $12.52 in Tuesday morning action.