KeyBanc Starts Sara Lee (SLE) at Hold; Shares Appear Fairly Valued
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Price: $18.50 --0%
Rating Summary:
5 Buy, 2 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 10
Rating Summary:
5 Buy, 2 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 10
Trade SLE Now!
KeyBanc initiates coverage on Sara Lee (NYSE: SLE) with a Hold.
KeyBanc analyst says, "We believe the stock's performance will depend on the Company's ability to grow EBIT beyond the growth that is expected to come from the remaining benefits of its cost savings programs and lower costs related to recent divestitures. Specifically, we are projecting SLE's EBIT to increase by an average of 9% during each of the next two fiscal years (FY11 and FY12), but approximately 85% of the growth to come from lower corporate expenses, mark-to-market hedging gains and lower stranded overhead from recent divestitures. We have a positive view of the Company's long-term growth and margin expansion prospects given that the segment with the best growth prospects, International Beverage, is the Company's largest and has the highest margins. However, reasons for caution exist: SLE could struggle to pass through the recent substantial increases in its input costs; the Company has generated limited volume and sales growth over the past two years in its highest-growth business (International Beverage); and its fastest-growing product (L'OR espresso capsules) is the subject of a lawsuit by Nestle."
For more ratings news on Sara Lee click here and for the rating history of Sara Lee click here.
Shares of Sara Lee closed at $15.84 yesterday, with a 52 week range of $11.29-$15.40.
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KeyBanc analyst says, "We believe the stock's performance will depend on the Company's ability to grow EBIT beyond the growth that is expected to come from the remaining benefits of its cost savings programs and lower costs related to recent divestitures. Specifically, we are projecting SLE's EBIT to increase by an average of 9% during each of the next two fiscal years (FY11 and FY12), but approximately 85% of the growth to come from lower corporate expenses, mark-to-market hedging gains and lower stranded overhead from recent divestitures. We have a positive view of the Company's long-term growth and margin expansion prospects given that the segment with the best growth prospects, International Beverage, is the Company's largest and has the highest margins. However, reasons for caution exist: SLE could struggle to pass through the recent substantial increases in its input costs; the Company has generated limited volume and sales growth over the past two years in its highest-growth business (International Beverage); and its fastest-growing product (L'OR espresso capsules) is the subject of a lawsuit by Nestle."
For more ratings news on Sara Lee click here and for the rating history of Sara Lee click here.
Shares of Sara Lee closed at $15.84 yesterday, with a 52 week range of $11.29-$15.40.
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