Shares of Jamba Inc. jumped to a 3-year high Wednesday after a Wedbush analyst said that the fruit smoothie company has good opportunities to grow profit in the next few years.
THE SPARK: Analyst Kurt Frederick, who has an "Outperform" rating on Jamba's stock, said the company's shares could rise as it launches new juices and food items. In a note to clients, he said the success of some of Jamba's competitors in selling juice were a good signal for Jamba.
Jamba did not immediately respond to an emailed request for comment.
THE BACKGROUND: The company, which owns or franchises about 800 Jamba Juice stores, has been struggling with declining sales and the costs of operating its namesake smoothie shops. As a result, it has shifted more of its stores to franchise operations and is launching new juices and other related branded products, like fruit chips.
THE ANALYSIS: Frederick predicts that earnings per share will grow steadily in the next few years, reaching 30 cents by 2016. The company posted a loss of 3 cents per share last year. Analysts polled by FactSet expect a profit of 8 cents per share this year
SHARE ACTION: Up 14 cents, or 4.8 percent, to $3.03 in afternoon trading Wednesday. The stock peaked earlier in the day at $3.09, its highest point since May 2010.