Central Garden & Pet Company: Negativity Priced In

The share price of Central Garden & Pet Company (CENT) has plummeted nearly 33% over the past quarter in response to disappointing sales and earnings performance during the first quarter of FY19.

This significant decline in share price is also attributable to a weak outlook as the company is projecting its earnings per share to drop by 22% during FY19 due to mounting costs pressure and a notable increase in the number of shares. I think, a lot of negatively is already priced in, and it appears to be a good time to buy the stock for a decent upside as the initiatives like increase in selling prices and rollout of new products coupled with the favorable demand dynamics will positively impact the stock price.

The poor performance of pet animal health business is attributable to the entry of a more aggressive competitor.