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Analyst: Walmart is 'logical buyer' for Blue Apron

Walmart Inc. is a logical buyer for Blue Apron Inc., the meal kit company that has seen its stock price plummet since going public last year, Matthew Trusz, Gabelli & Co. analyst, said in a Feb. 2 note initiating coverage of Blue Apron.

Walmart could put Blue Apron's product on its shelves, easing some of the meal kit company's "well-publicized operational issues," by providing scale and a cheaper way of getting the meal kits to customers, Trusz wrote in his note, setting a "buy" recommendation for Blue Apron.

Blue Apron shares rallied as much as 7% on Feb. 2 after the release of the Gabelli report. But they ended the day up just 0.7% higher at $3.04. At the time of its IPO in June 2017, Blue Apron's stock was $10 per share, according to the note. Trusz said the stock is down because of problems transitioning to a highly automated facility in Linden, N.J.

Walmart declined to comment on the note or a potential Blue Apron acquisition.

"Quality issues forced marketing activity, and therefore revenue growth, to a halt," he said in the note.

Walmart, meanwhile, has shown an interest in meal kits to bolster its grocery business. The world's largest retailer has listed kits from third-party manufacturers on its website and has partnered with Japanese online services provider Rakuten Inc. to deliver a number of goods, including meal kits. Amazon.com Inc. filed a trademark for "prepared food kits" in July 2017.

"The company is building out its e-commerce business and already offers some meal kits online," Trusz said. "Like its $310 million purchase of Bonobos, buying Blue Apron would repeat Walmart's playbook of acquiring a branded e-commerce startup with a more-premium product to its core offerings."

Walmart has made, and plans to continue making, a number of e-commerce acquisitions throughout 2017. Last year, Walmart purchased men's online retailer Bonobos Inc., women's online retailer ModCloth and online outdoor apparel retailer Moosejaw.