UPDATE: UBS Upgrades Pinnacle Foods (PF) to Buy
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(Updated - November 14, 2016 8:38 AM EST)
UBS upgraded Pinnacle Foods (NYSE: PF) from Neutral to Buy with a price target of $54.
Analyst Steven Strycula said, "We are upgrading Pinnacle Foods to Buy from Neutral as we believe recent market dislocation and stock underperformance (PF lagged S&P by 10pp in last 3 trading days) creates an attractive buying opportunity for investors who missed PF's summer rally. We see opportunity for Pinnacle's valuation to rebound as we are forecasting PF sales and EPS to accelerate vs the group in FY17. Our margin math on PF's Boulder acquisition (closed in Jan 2016) identifies upside to current synergy/ EBITDA guidance (UBSe ~$0.05 to EPS) and we see outsized COGS productivity gains and favorable portfolio margin mix driving gross margin +350 bps higher by FY20. We are raising our FY17 EPS estimates to $2.47 from $2.41 (above Street at $2.44) to reflect higher margin contributions from Boulder, and accelerating organic sales trends (to +2.3% in FY18 and +0.8% in FY17 from -0.1% in FY16)."
Shares of Pinnacle Foods closed at $47.79 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Upgrades
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