Pivotal Research Cuts Price Target to $10 Following Flowers Foods (FLO) Rejected Appeal

Pivotal Research reiterate a Sell rating on Flowers Foods (NYSE: FLO), and cut the price target to $10.00 (from $14.00), following the rejection of FLO's appeal against a class-action lawsuit. The lawsuit was filed on behalf of about 200 distributors in North Carolina.

Analyst Timothy Ramey commented on FLO, saying, "Last Thursday Flowers Foods lost its appeal of the certification of a class-action lawsuit filed on behalf of 200 or so distributors in North Carolina, South Carolina, Virginia, and West Virginia. On March 24th the U.S. District Court for the Western District of North Carolina certified the class action. FLO appealed the certification of the class; on May 21st the court rejected Flowers’ appeal, so the suit will move forward. FLO has not yet disclosed this legal issue but we expect they will in the 1Q10-Q filed later this week. At issue is whether the classification of “independent distributors” as “independent contractors” is correct, or should they more properly be classified as employees. The suit is titled Rehberg et al v. Flowers Foods, Inc. et al."

For an analyst ratings summary and ratings history on Flowers Foods click here. For more ratings news on Flowers Foods click here.

Shares of Flowers Foods closed at $23.12 yesterday.

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