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Pivotal Research Upgrades Flowers Foods (FLO) to Hold

December 9, 2016 3:39 PM EST
Get Alerts FLO Hot Sheet
Price: $22.78 --0%

Rating Summary:
    3 Buy, 10 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 5 | New: 36
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Pivotal Research upgraded Flowers Foods (NYSE: FLO) from Sell to Hold with a price target of $17.00 (from $4.00). Earlier the company announced a $9 million settlement in a class action lawsuit, Rehberg et al. v. Flowers Foods.

"Flowers Foods Settled the Rehberg case for fairly small dollars, $9.0 million covering 270 distributors ($19,260 per route), much lower than we had hoped for and a fairly inconsequential amount to Flowers," said analsyt Tim Ramey. "The lead plaintiff’s attorney here has five other suits so one should likely expect a similar settlement in those. But the big-dollar threat to FLO seems like it won’t materialize."

"Moreover, we have lost confidence that the Department of Labor will make meaningful headway on the misclassification issue given the appointment of Andrew Puzder as the labor department chief," continued the analyst. "While we continue to believe Flowers is a weak company in a difficult business, it is unlikely in our view that it will be compelled to repurchase all of its routes and trucks. Thus, in our view the existential threat to Flowers is over."

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 $17.03 yesterday.



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