Janney Montgomery Scott Re-initiates Coverage on American Italian Pasta (AIPC)

May 28, 2009 5:35 PM EDT

Janney Montgomery Scott re-initiates coverage on American Italian Pasta (Nasdaq: AIPC) with a Buy. fair value target of $38.00.

Janney analyst says, "Our positive stance is based on five factors: 1) above-average organic volume growth driven by value-conscious consumers in a recessionary environment, 2) AIPC s attractive positioning (50%+ share) in the private label dry pasta category, 3) increased profitability as a result of higher pricing, renewed volume growth, high capacity utilization, fixed cost leverage, and continued cost savings, 4) strong free cash flow generation (aided by the use of NOLs) that will allow the company to meaningfully deleverage the balance sheet over the next two years, and 5) valuation at 5.5 times our FY09 EBITDA estimate of $130 million. We believe the stock has limited downside and looks particularly undervalued considering the near and intermediate-term tailwinds."

To see more analyst ratings on AIPC Click Here.

American Italian Pasta Company, incorporated in 1988, is a producer and marketer of dry pasta in North America.

Related Categories

New Coverage

Stocks Mentioned

Related Entities

• Janney Montgomery Scott

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?