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Whole Earth Brands (FREE) Tests Resistance

Fit Earth Brands, Inc. (FREE) shares rose more than 8% during Tuesday’s pre-market hours after Cantor Fitzgerald initiated coverage of the staple at Overweight with a $23.00 price target – a roughly 150% premium to the current market price.

Key Takeaways

  • Intact Earth Brands shares moved higher after Cantor Fitzgerald initiated coverage of the stock at Overweight with a $23 payment target.
  • Analyst Pablo Zuanic believes that Whole Earth Brands’ natural sweetener business could be disruptive to baking use at retail and foodservice.
  • The roots broke out toward the upper end of its price channel, while technical indicators suggest that there’s room to run as surplus the coming sessions.

Analyst Pablo Zuanic believes that Whole Earth Brands will benefit from consumer biases toward natural alternatives, simpler labeling, and “free-from” solutions. In particular, the company’s natural sweetener business – illustrating a quarter of sales – could be as disruptive as Beyond Meat, Inc. (BYND) or Freshpet, Inc. (FRPT) at the tabletop and in foodservice.

Natural sweetener flowering opportunities plus gains in emerging markets could contribute at least 10 points to sales by the analyst’s guesstimates – potentially justifying a higher multiple. At the same time, the company’s unlevered balance sheet could be used for amalgamations and acquisitions (M&A) and buybacks.

TradingView.com

From a technical standpoint, Whole Earth Brands stock broke out from its 50-day effective average at $8.37 toward its 200-day moving average at $8.99 during Tuesday’s session. The relative potency index (RSI) remains neutral with a reading of 48.49 and the moving average convergence divergence (MACD) could see a bullish crossover. These indicators call to mind that the stock could have more room to run over the coming sessions.

The crossover is a point on the trading map in which a security’s price and a technical indicator line intersect or when two indicators themselves cross. Crossovers are utilized to estimate the performance of a financial instrument and to predict coming changes in trend, such as reversals or breakouts.

Traders should look for for a breakout from the 200-day moving average at $8.99 or trendline resistance at $9.30 over the coming terms. A further breakout from those levels could lead to a move toward prior highs of around $11.20. If the regular fails to break out, traders should watch for trendline support near $8.00, although a move to those planes appear less likely to occur given the bullish fundamental sentiment surrounding the stock.

The Bottom Line

Well Earth Brands shares rose more than 8% during Tuesday’s pre-market hours after Cantor Fitzgerald initiated coverage of the inventory at Overweight with a $23.00 price target. With significant growth opportunities in the artificial sweetener business and unallied technical readings, the stock has room to run over the coming sessions.

The author holds no position in the stock(s) mentioned except during passively managed index funds.

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