UPDATE: Imperial Capital Upgrades Lifeway Foods On 4Q14 Results

In a report published Wednesday, Imperial Capital analyst Mitchell B. Pinheiro upgraded the rating on

from In-Line to Outperform, and raised the price target from $17.00 to $22.00. In the report, Imperial Capital noted, "Our price target is about 22% above LWAY's recent share price. Our more positive stance on LWAY is predicated on continued mid-teen revenue growth (new distribution, new products, consumption gains) and strong margin expansion related to the significant decline in Class II milk prices (currently -35% yoy). We are increasing our 2015 EPS estimate to $0.55 from $0.51 to reflect a more favorable gross margin from lower milk costs, increased internal milk processing and continued SG&A leverage. "We remain positive on LWAY's leadership in the kefir and probiotics category and expect strong consumer demand for dairy-based probiotics. New branded competitors in the category may be the most significant risk to the top line, but Lifeway remains the dominant and most innovative company in the category. The stock now trades at a more reasonable 14.4x our 2015 EBITDA estimate and our $22 price target implies a 15.5x forward multiple, levels that we believe are reasonable and attainable. We believe our 2015 estimate has upside on both revenue and margins and believe the risk/reward is favorable at current levels." Lifeway Foods closed on Tuesday at $17.97.