UBS Cuts Price Target on Nomad Foods Limited (NOMD) to $13; Reiterates Buy
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UBS maintained a Buy rating on Nomad Foods Limited (NYSE: NOMD), and cut the price target to $13.00 (from $14.00), following the company's 3Q earnings report. On Tuesday's earnings call Nomad reiterated that it wanted to stabilize revenue trends; and to accelerate Findus synergies in 2017.
Analyst Steven Strycula commented, "Nomad's stock declined -6.5% on Tues despite a sequential sales improvement (-3.3% in 3Q16 vs. -3.8% in 2Q) and a +€0.02 EPS beat. The selloff, in our view, is attributable to a slower than expected revenue recovery outlook for 4Q16 and 1H17 vs. Street expectations due to transitory items (France destocking ahead of Findus sell-in, hake shortage in Italy, Sweden salmon biz). Uncertainty concerning Nomad's planned UK price increase creates additional near-term risk as the company finalizes 2017 trade programs with retailers. Though Nomad's revenue and margin catalysts now skew to mid-2017 (vs. early 2017), we believe the stock offers attractive risk/reward for value investors – we recommend buying the stock particularly on weakness."
Shares of Nomad Foods Ltd closed at $10.00 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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